Running a company in India comes with multiple legal and compliance responsibilities. Whether you are incorporating a new company, issuing shares, raising investments, structuring ESOPs, or managing ROC compliances, understanding the provisions of the Companies Act, 2013 is essential.
At Startup Movers, we regularly assist startups, founders, SMEs, investors, and professionals with company law compliances and advisory. To simplify complex legal provisions, we have curated this detailed FAQ guide covering some of the most commonly asked questions under the Companies Act, 2013.
This guide is designed to help:
A One Person Company requires:
The nominee becomes the member in case of death or incapacity of the original member.
Under Section 149(1) of the Companies Act, 2013, an OPC can appoint up to 15 directors. The company can appoint more than 15 directors after passing a special resolution.
3. Is it mandatory to mention “OPC” in the company name?
Yes, every One Person Company is required to mention “(OPC) Private Limited” at the end of its name.
Example: ABC Technologies (OPC) Private Limited
4. Can a foreign national incorporate an OPC in India?
No, only a natural person who is an Indian citizen, and resident in India is eligible to incorporate an OPC or become its nominee.
5. Can an OPC carry out NBFC or investment activities?
No, an OPC cannot carry out Non-Banking Financial Investment activities, including investment in securities of any body corporate.
6. Can a Private Limited Company be converted into an OPC?
Yes, but only if:
Conversion eligibility must comply with the Companies (Incorporation) Rules.
7. What registrations can be obtained during company incorporation?
Along with company incorporation, businesses can also apply for:
This helps businesses become operational immediately after incorporation.
8. What is a Section 8 Company?
A Section 8 Company is a non-profit organization formed for:
Such companies apply their profits toward promoting their objectives instead of distributing dividends.
9. Which words can be used in the name of a Section 8 Company?
A Section 8 Company may use words such as:
These words indicate the non-profit nature of the entity.
10. What documents are required when a foreign company sets up a subsidiary in India?
Generally, the following documents are required:
Additional documentation may be required depending on the country of incorporation.
DVR shares are equity shares issued with differential rights relating to:
Voting rights
Dividends
Other shareholder rights
These are commonly used in strategic corporate structuring.
12. Can directors receive ESOPs?
Yes, directors can receive ESOPs in certain cases, particularly in startup companies, subject to the Companies Act and ESOP scheme conditions.
However, independent directors are not eligible for ESOPs.
13. What is the minimum vesting period for ESOPs?
The minimum vesting period between grant and vesting of ESOPs is one year. This ensures long-term alignment between employees and the company.
14. Can startups issue Sweat Equity Shares?
Yes, eligible startups can issue sweat equity shares to directors or employees in consideration for:
15. Can a company issue shares at a discount?
Generally, companies cannot issue shares at a discount, except in the case of sweat equity shares. However, shares may be issued below market value under certain strategic transactions, subject to valuation norms.
Private Placement refers to offering securities to a select group of identified persons instead of the public at large. It is governed primarily under Section 42 of the Companies Act, 2013.
17. Within how many days should securities be allotted under private placement?
The company must allot securities within 60 days from the date of receipt of application money.
18. What is Form PAS-3?
Form PAS-3 is the Return of Allotment filed with the Registrar of Companies after allotment of securities. It must generally be filed within 15 days of allotment.
19. Is valuation mandatory for issuing shares?
Yes, valuation is generally required in cases involving:
Valuation must be conducted as per applicable legal and regulatory provisions.
Form MGT-7 is the Annual Return filed by companies with the Registrar of Companies. It contains details regarding:
21. What is Form AOC-4?
Form AOC-4 is used for filing financial statements with the ROC. It includes Balance Sheet, Profit & Loss Statement, Auditor’s Report, Board Report, etc.
22. Is statutory audit mandatory for Private Limited Companies?
Yes, every Private Limited Company registered under the Companies Act, 2013 is required to conduct a statutory audit irrespective of turnover.
23. What happens if ROC compliances are not filed on time?
Delayed ROC filings may result in:
Timely compliance is critical for maintaining a healthy compliance status.
At Startup Movers, we help startups and businesses manage end-to-end corporate compliances under the Companies Act, 2013.
Our services include:
With a founder-first approach and deep startup ecosystem experience, we simplify legal and compliance operations so businesses can focus on growth.
Whether you are incorporating a company, issuing shares, structuring ESOPs, or handling ROC compliances, our experts can help you stay fully compliant under the Companies Act, 2013.
Connect with Startup Movers
Published Date: 20 Apr 26
© 2026 Startup Movers All rights reserved. | Designed By : The Night Marketer
Leave a Comment
Comments
No comments yet.
RECENT ARTICLES
ROC Compliances for Private Limited Companies: Complete Guide
LLP Annual Compliance Complete Guide (2026)
Form DPT-3: Due Date, Purpose & Applicability
Old vs New Tax Regime (FY 2025–26): Which Is Better for Salaried Individuals?
Companies Act 2013 FAQs | ROC Compliance, ESOP, OPC & Company Law Guide
Key Changes in DIR-3 KYC: Every Director Should Know
LLP Advantages & Disadvantages: Everything you need to know
Form 11 LLP Annual Return: Filing, Due Date, Penalties