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PRIVATE LIMITED COMPANY REGISTRATION Services Overview in India
A Private Limited Company is the most popular type of business in India. Before the Company’s Act 2013, in a Pvt Ltd Company, the minimum number of shareholders required was 2 and the maximum was 50. After the amendment of the Companies Act in 2013, the maximum number of shareholders increased from 50 to 200. Benefits of a Pvt Ltd Company There are various advantages of a private limited company over a public company but the biggest advantage is in its name itself - ‘limited’, i.e., the owner is only liable for the number of shares he owns. Another advantage is that the company has a corporate identity which helps in gaining the trust of the clients. For a Pvt Ltd Company to get loans from banks is hassle-free as compared to others as the company has legal recognition. It is easier to get seed funding(investors) when the idea of the business is unique and there is an actual need for it in the market. For example Swiggy, Ola, Paytm. Minimum Requirements / Rules to Register There has to be a minimum of 2 Directors – According to the Companies Act 2013 Section 149, a Pvt. Ltd Company must have at least 2 directors and among them, 1 has to compulsorily be an Indian. Appointment of Auditor- A CA must be appointed within 30 days of incorporation. Capital – At present Rs. 1,00,000 should be the minimum paid up capital. The right to decide the paid up capital is only with the Ministry of Corporate Affairs (MCA) .This is mentioned in Section 2(68) of the Companies Act. Company Name – According to the guidelines of the ROC, the company name must be lawful and unique and must not violate any social sentiment. It should define the nature of the company. Location – A solid proof of the location of the company. The location can be owned, rented or leased. Documentation – MoA and AoA. Prohibition – Invitation to the public for issuing shares is prohibited. Key Managerial Personnel ( K.M.P) – It becomes compulsory for a Company to fill in the 6 positions mentioned below once the paid-up share of the company exceeds Rs. 5 Crore i. CEO (Chief Executive Officers) ii. MD (Managerial Director) iii. WTD (Whole Time Director) iv. CS (Company Secretariat) v. CFO (Chief Finance Officers) vi. Managers Mistakes do not make while applying to register As per ROC, 12% of the applications are rejected because of some common mistakes which they make while registering. During DIN registration, your PAN Card should match other ID proof like Passport, Driving License, or Voter ID. If there are any mistakes in the documents you must correct them first such as the spelling of your name or your birth date. There should be no spelling mistake in the MoA and AoA. In maximum cases, there is either mistake in the spelling of the Directors name or in the registered address or sometimes even the Company Name is spelled incorrectly. Correcting these later is a tedious process, so checking before you submit the documents is very important. The documents required must be ready before applying. No document should be neglected in a hurry. Business description must be accurate in the MoA. The tax registration should not be ignored. If your business is applicable for GST, then GST registration is mandatory for your business. And if the place of your business is in some special states like West Bengal, P-Tax or Professional Tax is important. Intellectual Property like copyright or trademark should not be ignored.
Steps To Obtain Pvt Ltd Company IN INDIA
- Application of DSC & DPIN
- Name approval
- MOA & AOA submission
- Get the incorporation certificate
- Apply for PAN, TAN and Bank account
The partners have to apply for Digital signature and DPIN. A digital signature is an online signature used for filing and Directors PIN issued by MCA. If the directors have DSC and DPIN, then this step can be skipped.
You need to provide 3 different name options for your company to MCA of which one will be selected. Names provided should be unique and suggestive of company business.
Once the name is approved, one is required to draft the Memorandum of association and Articles of Associate. Both documents are filed with the MCA with the subscription statement.
Ministry of Company Affairs has introduced Form SPICe (INC-32). It is a simplified form for incorporating a company electronically. Incorporation certification is proof that the company has been created. It also includes your CIN number.
Apply for PAN and TAN. Both are received in 7 working days. You can submit the Incorporation certificate, MOA, AOA and PAN with a bank to open your account.
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Estimate Time Required for PRIVATE LIMITED COMPANY REGISTRATION
Once the name of your company is approved then the required documents are to be submitted. When this is done, your company should be registered for the next 10-12 working days.
Documents Required for Private Limited Company registration
The documents mentioned below are needed to be filed with the Registrar of Companies.
Identity Proof – PAN Card, Aadhar Card, Passport, Driving License of the Directors and Voter ID must be submitted.
Address proof and Rent Agreement – Both the address proof of the director and his business is required along with the Electricity Bill/ telephone bill of the Office. If the registered office has a rent Agreement it should be provided. The Bank Statement of all the Directors of the Company of the past 6 months must be submitted.
MoA (Memorandum of Association) – It is a very important document. It mentions the external factors related to the company, why the company is formed, all the basic information about the company like its name, location, nature and objective, capital clause etc. It must be drafted very carefully because the company would not be able to do anything which is not mentioned in MoA. It is difficult to get it altered once submitted. This document is required majorly as it is made public to the shareholders of the company
AoA (Articles of Association) – It mentions the internal things of the Company like how the company will work, its duties, purpose share capital, management decisions, dividend policy, the appointment of directors, shareholder’s meetings.
Passport size photograph- Latest Passport size photograph of Shareholders and Directors.
NOC from the owner – No Objection Certificate to be obtained from the owner(s) of the registered office.
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FAQ
There are multiple reasons to choose a private limited company :
Preferred by banks, VCs & investors.
Easy to allocate and redistribute shares to investors or other directors.
The separate legal entity which limits your liability.
Offers the flexibility of a partnership firm and the advantages of a Public Company.
Easy to register, manage & run.
Easy to dissolve or wind-up.
A private limited company is one of the modes of doing business, which means it can be started from scratch. For that matter, even after incorporating a private limited, there is no obligation that the company must have a certain turnover.
Any type of Startup Business is Registered as-
1) As a Firm Registration is also 2 Types
a) Sole Proprietorship Firm- Its a very basic process to start any business in India. if you are a single owner then just go to nearby Any Bank and say them open your current bank account. in Proprietorship main Objective is "Current Bank Account".
b) Partnership Firm: its a very simple process if you have partners but its an old traditional form of partnership. just go to nearby any notary and purchase a Stamp Paper of 500 Rupees and drafting your legal terms and conditions of partners but if you want to register it then go to nearby Registrar of Firms with your partnership deed and give to bribe to babu and register it then Apply for PAN & Open Current Account.
2. As an LLP: LLP is the new concept in India. in simple words, it’s a mixture of Partnership and Company so it has a feature of Partnership and Company. its a best for Startups. it has many advantages as compared to a private limited company. the main advantage for startups is capital requirements and compliances at the year attending. in a company, many compliances have to file to MCA but in LLP just 2 statements filed to ROC.
3) As a Company your startup is registered 2 types.
a) Private Limited Company- Old Trend in India. private limited company require min 2 directors and 1 lakh share capital and more compliance. It’s a best for which startup wanna raise the funds from the investors. and sell out their share in the company.
b) One Person Company- same as above. just require minimum 1 persona but capital is the same as 1 lakh rupees.
Technically the shareholders. But since a private limited Company is formed by very few closely known people, it's mostly the Directors who own them
LLP is a much better option than a Private Limited Company. The Limited Liability Partnership carries all good advantages of the partnership firm and also covers the unique features of the Private Limited Company. LLP has less cost of compliances than of the Private Limited Company. There are many more taxation benefits in the case of LLP. Various taxes that are exempted in the case of LLP, such as Wealth Tax, Surcharge, and Dividend Distribution Tax, whereas all these taxes are levied in case of the Private Limited Company. The benefits of saving money are more in LLP, and therefore advantages of LLP is more than that of Private Limited Company.
The maximum number of directors in a private limited company is 15.
Yes, a person can be a director without holding shares in a private limited company but only for 2 months. If after the end of 2 months, the director still does not hold any shares in the company, he will be punishable with a fine of fifty rupees per day, after the expiry period.
No, a director is not responsible for company debts.
No, personal assets of directors cannot be seized from an Ltd company.
if a limited company can not pay its debts, it can be liquidated, wound up.
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