Readymade Company: Buy an Existing Shelf Company in India
A readymade company is a company already incorporated with the ROC that has not started real business. You buy it by taking over its shares and changing its directors. The shortcut is only as good as the checks behind it, so we review its filings, tax and charges before you pay.
What it is
A readymade company, also called a shelf company, is a company that was incorporated earlier and has done little or no business since. Instead of waiting for a fresh private limited company registration, a buyer takes over the shares and replaces the directors. The company keeps its name, CIN, PAN and incorporation date.
There is no separate “readymade company” law. In law, the sale is an ordinary transfer of shares under Section 56 of the Companies Act, 2013, followed by director changes under Section 170 and Section 168 and filings on the MCA V3 portal. A shelf company is legal. A shell company used to hide money is not, and the MCA watches for it. We work only on genuine takeovers with a business purpose.
Readymade company or fresh incorporation
| Point | Readymade company | Fresh incorporation |
|---|---|---|
| Incorporation date | Earlier date, existing CIN | New date, new CIN |
| Past liabilities | You inherit them | None |
| Name | Existing name; change needs special resolution and INC-24 | Your chosen name, approved first |
| Main work | Due diligence, SH-4, DIR-12, clean-up | SPICe+ filing and PAN, TAN, DIN allotment |
For most new businesses, a fresh company is simpler and carries no history.We will price both routes for you.
Who it applies to
Buyers who need an older entity
Tender bidders, lenders and some overseas partners ask for a company with a few years of existence. Picture a Faridabad contractor told that a tender needs a five-year-old company. A readymade company gives you that date on day one.
Promoters in a hurry
If a contract must be signed this month, taking over a clean company can be faster than a new incorporation, name approval and bank account. It is not always cheaper.
Owners who want to exit
If you hold a dormant private company, you can sell it. We help you tidy the filings first, because a buyer will check them and price the gaps.
Why it matters
Existing track record
A company that has filed on time looks better to banks and vendors than a new one.
Possible time saving
Name approval and fresh incorporation are skipped. Due diligence and transfer filings replace them, so the saving depends on how clean the company is.
Risk moves to the buyer
You inherit every past default, tax demand and charge. Checking before you pay is the difference between a useful shelf company and an expensive clean-up.
Documents required
From the seller
- Certificate of incorporation, MOA and AOA
- Share certificates and register of members
- Statutory registers and minute books
- Last three years of AOC-4 and MGT-7 filings
- Income tax returns and GST returns, if registered
For the share transfer
- Share purchase agreement
- Form SH-4 duly stamped and signed by both sides
- PAN and address proof of buyer and seller
- Valuation support for the price
For the new board
- DIR-2 consent, DIR-8 declaration and MBP-1 from each incoming director
- DIN, PAN and address proof of each director
- Resignation letters from outgoing directors
- Rent agreement and utility bill if the office changes
How it works
Check the company before you agree a price
We pull the MCA master data and check status, filings, charges, DINs, income tax and GST. A company that has not filed for two years may already be on the strike-off track under Section 248.
Sign the share purchase agreement
The share purchase agreement fixes the price, the seller’s warranties on past liabilities, and an indemnity if hidden dues surface. We prepare the draft; a practising advocate reviews it where legal sign-off is needed.
Transfer the shares
Both sides sign Form SH-4 and pay stamp duty. The company records the buyer in its register of members and issues new share certificates. The share transfer itself is not filed with the ROC; the change shows up in the next MGT-7.
Change the board and file DIR-12
Outgoing directors resign, incoming directors consent, and we file DIR-12 on the MCA V3 portal. Here is the catch: a private company needs at least two directors and one resident in India, so the new board must be in place before the old one leaves.
Update name, office, auditor and banking
If you want your own brand, the next steps are a company name change, a new object clause and a registered office change. We also file the auditor appointment and update bank signatories.
Timelines
Within 30 days: board and office filings
Within 60 days: SH-4 delivery
Overall: depends on the checks
What happens if you skip due diligence
Inherited late fees
Disqualified directors and strike-off
Tax and loss surprises
Frequently asked questions
Is a readymade company legal in India?
Yes, buying an existing company is legal. It is done by transferring shares under Section 56 of the Companies Act, 2013 and changing directors. What is not legal is using such a company as a shell to move or hide money, which the MCA actively checks. We take on only genuine takeovers with a clear business purpose and clean records.
How long does it take to take over a readymade company?
It depends mainly on the seller’s records. Once documents are ready, the SH-4 transfer and director changes take a few days, and DIR-12 is due within 30 days of each change. Due diligence is where time goes. If filings are missing, fixing them can take longer than a fresh incorporation.
What checks should I do before buying a readymade company?
Check five things: company status on the MCA portal, AOC-4 and MGT-7 filing history, registered charges, director DIN status, and income tax and GST returns. We run these checks and give you a short list of gaps.
Is stamp duty payable on a share transfer?
Yes. Transfer of shares is charged at 0.015% of the consideration, which is ₹1,500 per crore, uniformly across states since 1 July 2020. For physical shares it is paid on the SH-4. For shares in demat form the depository collects it.
Can I change the name and objects of a readymade company?
Yes. A name change needs a special resolution, name approval through RUN, MGT-14 and Form INC-24, and the company must have filed its annual returns and financial statements first. An object clause change needs a special resolution and MGT-14. PAN and CIN stay the same. We prepare and file these in order.
Do the old directors stay liable after they resign?
Resignation takes effect from the later of the notice reaching the company or the date in the letter, but the director stays liable for offences during the tenure. That is why sellers want DIR-12 filed promptly. We file it inside the 30-day window.
Can a foreign national or NRI buy a readymade company?
Yes, but it becomes a FEMA matter. A transfer of shares from a resident to a non-resident must follow the pricing and reporting rules, and a company needs at least one director resident in India. We check the sector rules and reporting steps before you sign.
Will the company need annual filings after the takeover?
Yes. The company must file AOC-4 and MGT-7 every year, hold board meetings and keep an auditor, whether or not it trades. Directors must also complete DIR-3 KYC. We can run this routine through our annual compliance work so the shelf does not turn into a default.
What is the cost of a readymade company?
The price is whatever you and the seller agree. On top, you pay stamp duty at 0.015%, government filing fees and our fee. We quote after the due diligence, so you see every figure first.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
Government charges in a takeover: stamp duty on share transfer at 0.015% of the price; DIR-12, INC-22 and MGT-14 normal fees of ₹200 to ₹600 by authorised capital; name reservation fee of ₹1,000 if you rename. Late event-based forms cost 2 to 12 times the normal fee. Annual forms carry ₹100 per day.
Ready to begin?
Tell us the company you are considering, or the one you want to sell, and we will check its records first.