Establishing a company can be broadly classified into:
(A) Promotion and
(B) Procedure for obtaining certificate of incorporation.

Let us understand both in detail.
(A) Promotion:
Promotion refers to the thought or idea that comes into mind for establishing a company and prepare for the same.
The person(s) or partnership firm or even a Joint stock company who executes the idea is called a promoter of the company.

Points to consider by promoter:
1. Idea of promoting the company:

The promoter first need to research and assess the need of the new company. He needs to be clear whether the new company will be established for developing and selling a new product or a service, etc. .

2. Primary and detailed investigation:

• Once the promoter gets clarity about the new product or service he wish to sell through the new company, he needs to conduct thorough primary as well as detailed investigation to test if the idea will work in the market.
• The idea is now to be tested on practical grounds with a strong business perspective. Various aspects such as selecting the right product and service for the business, profitability of the business, etc. are thoroughly investigated for successful implementation of the business.
• Initially a primary test and survey is done. Based on the results, detailed study and analysis is done is the market.
• Also, information regarding how much capital will be needed, how will it be raised, sourcing raw material, demand and market trend, equipment and machinery needed, land and human resources, transport facilities, power, water availability, etc. is gathered at in depth.

3. Mobilizing resources:

The promoter needs to mobilize i.e. start deploying human and physical resources. -» The promoters enter into contracts to obtain land, raw material, machinery, services, hire employees, etc.

4. Financial arrangement:

• The promoters need to decide how and from where they will raise the finance i.e. capital for the company.
• For example, whether they should raise their own funds or obtain it by issuing shares, obtain loan, borrow, etc.

(B) Procedure for obtaining certificate of incorporation:

Once the promotion phase is over the process of obtaining certificate of incorporation begins. A certificate of incorporation is to be obtained from the Registrar of Companies.

Following documents need to be prepared and submitted to the Registrar of Companies to obtain the certificate:
1. Memorandum of Association (MOA):

• A Memorandum of Association (MOA) is a legal document prepared during the formation and registration process of the company. MOA defines company’s relationship with shareholders.
• General public can access company’s MOA. It contains company’s name, physical address of registered office, name of share-holders, etc.
• The MOA and Articles of Association together serve as a constitution of the company. Just like a constitution describes the country, a company’s MOA and Articles of Association describe the company.

An MOA must compulsorily include the following clauses:
(A) Name clause:

• As per the name clause, a public company with liability by share needs to insert the word ‘Limited’ at the end of company name whereas a private company needs to insert the words ‘Private Limited’ at the end of its name.
• A company cannot not select a name which resembles name of other registered company in India or which can harm the national interest.

(B) Address of Registered office clause:
The company needs to mention the physical address of its registered office so that the Registrar of Companies and public can communicate with the company. Moreover, based on the address the court can decide the jurisdiction of the company.

(C) Object clause:

• Object clause is the most important clause of memorandum.
• Under this clause, the company needs to clearly mention the objective and the type of business it would conduct. It cannot conduct activities other than mentioned in this clause.

(D) Liability clause:

• Under this clause the company mentions if the liability of members is limited, unlimited or limited by guarantee.
• In case of One Person Company, the company needs to mention name of the person who will replace the original person in case of death, inability to enter into contracts, etc. of the original person.

(E) Capital clause:
Under the capital clause the company mentions the amount of share capital with which the company proposes to register and the division of capital into shares of fixed amount.

(F) Association clause:
In this clause minimum 7 members in case of a public company and minimum 2 members in case of a private company need to give a slatement along with their signatures showing their desire to establish the company.

2. Articles of Association:

• The Articles of Association is a document that contains the purpose of the company as well as the duties and responsibilities of its members.
• It also contains the rules and regulations under which the company will conduct its administration.
• Rights of members, share installment, share forfeiture, powers of Board of Directors, etc.
• Both the documents i.e. Memorandum of Association and Articles of Association become public documents after they get registered.

3. List of directors:

• The company needs to provide and register the list of persons who wish to work as directors to the Registrar of Companies.
• The list contains name of persons, address, age, sex, occupation, nationality, etc.
• The company must compulsorily include one female director in its Board of Directors.

4. Written consent of directors:
People whose name is mentioned as directors in the company need to give a written consent that they wish to work with the company on their own will.

5. Declaration of interest in other companies:
If the directors of company, managers, secretary or subscribers have interest in any other company, firms, etc, then they need to disclose it by filing a statement.

6. Statement of fulfillment of provisions of law:

• Once the company fulfills all the legal provisions discussed so far it needs to prepare a statement in the prescribed format and register it before the Registrar of Companies stating that the company has fulfilled all the legal provisions needed for incorporating a company.
• On completing all the procedures and documents the Registrar of Companies after verification and thorough investigation issues certificate of incorporation and Corporate Identification Number (CIN) to the company. The date of issue of this certificate becomes the date of establishment of company.