Private Limited Company Registration
Looking to register a Private Limited Company in India? The process is straightforward and offers numerous advantages, including limited liability and ease of raising capital. To begin with, obtain a Digital Signature Certificate (DSC) and a Director Identification Number (DIN) for at least two directors, who can also be shareholders. Subsequently, choose a unique company name and obtain approval from the Ministry of Corporate Affairs (MCA). After receiving the name approval, you should file the incorporation documents, such as the Memorandum of Association (MOA) and Articles of Association (AOA). Once you submit and verify these documents, the Registrar of Companies (ROC) will issue a Certificate of Incorporation (COI). This streamlined registration process not only enhances accessibility but also boosts efficiency for entrepreneurs who seek growth and credibility.
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Private Limited Company - An Overview
“Companies Act, 2013 (India)”
The Companies Act, 2013 (India) governs the incorporation, regulation, and winding up of companies in India. Specifically, this act details the procedures for registering a private limited company with the Registrar of Companies (ROC). Consequently, it outlines the steps and requirements necessary for compliance, thus ensuring that companies adhere to legal standards from their formation through their operational lifecycle and eventual dissolution.
A private limited company is a business entity where a small group of shareholders holds ownership; therefore, the company does not trade shares publicly. Consequently, shareholder liability is limited to their investment in the company, and the company can accommodate a maximum of 200 shareholders. Importantly, because the company does not trade shares publicly, the Registrar of Companies (ROC) meticulously regulates its registration and operations. To begin with, directors must provide their Director Identification Number (DIN) and Digital Signature Certificate (DSC). Additionally, you should submit essential documents, such as the Memorandum of Association (MoA) and Articles of Association (AoA), via the MCA portal. After completing this step, the Ministry of Corporate Affairs (MCA) will issue the incorporation certificate. Subsequently, the MCA will publish the company’s details on its website for public access.
Documents Required for Registration of a Private Limited Company
- PAN Card
- Aadhaar Card, Voter ID, Passport, or Driving License
- Latest Bank Statement or Passbook (Not older than two months)
- Passport size Photo
- Mobile Number & Email Id
- Office Address – Latest Utility bills like Telephone/Gas/Electricity bill (Not older than two months)
Private Limited Company Registration – Packages
We are your local consultants for Private Limited Company Registration in India, and we offer comprehensive services across all cities. To begin with, our team of expert registration professionals dedicates itself to facilitating your registration process. Additionally, we provide a Private Limited Registration package priced at ₹10,000. This all-inclusive package guarantees no hidden fees or advance payments. Furthermore, this package includes:
- Company Name Reservation
- DSC of (Two Directors)
- DIN of Two Directors
- MoA & AoA
- Company PAN and TAN
- Certificate of Incorporation (CoI)
- PF & ESIC Registration
- Company Bank Account
- INC 20A Form & ADT-1 Filing
- Inc. Gov. Fees & Stamp Duty
Benefits of Enrolling as a Private Limited Company
A key benefit of a private limited company is its adaptable management framework. Additionally, the company enjoys perpetual succession, meaning it continues to exist indefinitely until someone formally dissolves it. Furthermore, this structure offers several other advantages. Below are some additional benefits of forming a private limited company:
Limited Liability Protection
The law restricts the legal liability of a private limited company’s stockholders. Consequently, as a shareholder, you will be responsible for paying the company’s liabilities only up to the extent of your contribution. Additionally, this protection shields your personal assets from covering the company’s debts. Therefore, you benefit from a safeguard against personal financial risk.
Separate Legal Entity
The company operates as a separate legal entity and manages its own liabilities and assets. Consequently, this arrangement prevents creditors from seizing the personal assets of the directors and shareholders to recover money. As a result, the personal assets of directors and shareholders remain protected from business debts.
Perpetual Succession
A registered private limited company operates continuously until someone formally dissolves it, a concept known as perpetual succession. Consequently, this means that the company’s existence remains unaffected by the death of any of its founders. Moreover, the continuity of the company ensures stability and longevity regardless of changes in its founding members.
Easy to Raise Capital
A registered private limited company acts as a legal entity and can raise funds. Consequently, business owners can generate capital through equity and grow their business. Furthermore, they can achieve this growth while staying within the limits of their liability. Thus, the company’s structure facilitates both financial expansion and legal protection.
Trustworthiness
A registered private limited company acts as a legal entity and can raise funds. Consequently, business owners can generate capital through equity and grow their business. Furthermore, they can achieve this growth while staying within the limits of their liability. Thus, the company’s structure facilitates both financial expansion and legal protection.
Simple Share Transfer
In contrast to public limited companies, shareholders can smoothly transfer shares in a private limited company between individuals without affecting the company’s operations. Consequently, this flexibility enhances the company’s appeal to investors. Moreover, it provides shareholders with greater ease in managing their investments, further boosting the company’s attractiveness to potential stakeholders.
Owning Property
Private companies operate as distinct legal entities and can own acquired properties under their own name. Consequently, this separation allows the company to manage its assets independently from the personal assets of its shareholders. Moreover, this arrangement ensures that the company’s financial affairs remain distinct from the shareholders’ personal finances, thereby providing a clear boundary between personal and business assets.
Dual Relationship
Members of a private limited company can serve as both shareholders and employees. Consequently, this arrangement enhances the company’s operational efficiency and overall governance. Furthermore, combining these roles streamlines decision-making processes and fosters a more cohesive management structure. Thus, the dual role of members contributes to improved organizational performance and governance.
Capacity to Sue and Be Sued
The company can commence legal proceedings and become involved in legal actions using its own name. Consequently, this setup ensures that handling all legal matters in the company’s name protects shareholders from personal liability. Moreover, this arrangement safeguards individual shareholders from direct legal risks associated with the company’s operations, thereby providing an additional layer of financial protection.
Borrowing Capacity
Registered companies gain improved access to funding from banks and other financial institutions. Consequently, this access enables the company to secure funding and operate independently as a legal entity in the future. Moreover, this enhanced financial support facilitates growth opportunities and ensures sustained operational autonomy, further reinforcing the company’s stability and success.
Requirements for Online Registration of a Private Limited Company
According to MCA guidelines, you must register a private limited company with a minimum of two directors and shareholders. Consequently, shareholders can be either individuals or corporate entities, while directors must be natural persons. Additionally, you must have a registered office address in India. When filing for registration of a private limited company, you must fulfill the following criteria:
– Ensure that the applicant is at least eighteen years old.
– Verify that the applicant is an Indian citizen or resident.
– Confirm that the company will have between 200 and 300 members.
– Guarantee that there are at least two directors or shareholders.
Moreover, meeting these requirements will facilitate a smoother registration process and ensure compliance with legal standards.
Checklist for Creating a Private Limited Company
According to the MCA, you must meet specific criteria when registering your company. Consequently, here is a comprehensive outline of the checklist you need to follow for private limited company registration:
• Appoint a minimum of 2 Directors.
• Directors and shareholders can be the same person.
• Obtain DIN and DSC for all Directors.
• Meet the minimum Authorized Share Capital requirement.
• Fulfill the minimum Paid-Up Share Capital requirement.
• Prepare the Memorandum of Association (MoA) and Articles of Association (AoA).
• Provide details of the company’s operational address.
• Obtain an NOC and Lease Agreement from the landlord.
Moreover, adhering to this checklist will streamline the registration process and ensure compliance with all regulatory requirements, thus facilitating a smooth and efficient establishment of your company.
Types of Private Limited Company
In India, various types of private limited companies exist based on share distribution and other factors. Consequently, here are three classifications of private limited companies:
Companies Limited by Shares
These are among the most prevalent forms of private limited companies. In this type, the company holds share capital; therefore, shareholders’ liability remains limited to the amount unpaid on their shares. Consequently, this arrangement offers both financial protection for shareholders and a clear structure for managing company finances.
PVT Companies Limited by Guarantee
This category of company operates without share capital. Instead, its members pledge to contribute a defined amount to the company’s assets if the company dissolves. Consequently, this structure ensures that, in the event of dissolution, the members’ commitments to the company’s financial obligations remain clear and enforceable. Moreover, this arrangement provides a distinct alternative to companies with share capital, emphasizing member responsibility and asset contribution.
Unlimited Company
In this category, members face unlimited liability. This type is rare because it increases the risk for its members.
Characteristics/Features of a Private Limited Company
Here are the distinguishing features of a Private Limited Company: restricted share transfers, independent legal entity status, and limited liability for shareholders.
• It operates as a distinct legal entity with a Limited Liability Structure.
• The company can own property and assets under its own name.
• The company can legally conduct business activities under its own name.
• You do not need a minimum paid-up capital to register a Private Limited Company.
• The company remains distinct from its shareholders.
• Shareholders benefit from limited liability concerning their shares in the company.
• The number of shareholders typically limits to around 200.
• Both individuals and corporate entities can act as shareholders.
• The Companies Act of 2013 governs private limited companies.
• Private limited companies must comply with legal requirements, such as filing annual financial statements.
• Registered private limited companies must hold annual general meetings.
• The company cannot publicly trade its shares.
• Share transfers are tightly restricted and require approval from existing shareholders and the board of directors.
• Shareholders have the authority to appoint directors to manage the company’s day-to-day operations.
• Shareholders and directors can be the same individuals.
• Registered private limited companies can issue shares to investors to raise capital.
• You can raise capital through loans from banks and other sources.
• The company’s capital remains separate from the personal assets of shareholders.
Procedure to Register Your Private Limited Company
To register a private limited company in India, first and foremost, you must acquire a Digital Signature Certificate (DSC) and a Director Identification Number (DIN) for the intended directors. Once this is done, the next step involves submitting the incorporation documents to the Ministry of Corporate Affairs (MCA). To make this process seamless, you will use the online SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form. Moreover, platforms like Legal Kamkaj offer a straightforward, three-step procedure for business registration, ensuring that, from the initial documentation to final approval, everything is handled efficiently. Thus, by following these steps diligently, the entire registration process becomes more streamlined and hassle-free.
- Name Approval Process
After you finalize your company name, our team will verify its availability and submit either a RUN or SPICe-A form. Once approved, we’ll promptly file the SPICe-B form, ensuring a seamless transition through the registration process and keeping everything on track for completing your company’s official incorporation.
- Get Your (DSC) and (DIN)
We submit form DIR-3 and assist you in obtaining your Director Identification Number (DIN) and Digital Signature Certificate (DSC), which are crucial for online document submission.
- Filing and Incorporation
First and foremost, we will diligently submit your Incorporation Documents, including the MoA, AoA, and SPICe+ form. Additionally, we’ll ensure accurate completion, guaranteeing your company receives its PAN and TAN. Furthermore, after all formalities are finalized, the MCA will issue the certificate of incorporation, thereby completing the registration process seamlessly.
Private Limited Company Registration FAQs
There is no specific minimum capital requirement for a Private Limited Company in India. It can be established with any amount of capital that the promoters consider suitable.
Yes, a foreign national can serve as a director in an Indian Private Limited Company. However, at least one director must be an Indian citizen.
The duration of the registration process can vary. On average, it takes approximately 15 to 25 working days, depending on government processing times, document preparation, and other procedural factors.
Any individual or entity, including foreign nationals, can establish a Private Limited Company in India. The company must have at least two directors and can accommodate up to 200 shareholders.
Each has its own advantages. OPC is ideal for small businesses, while Private Limited Companies are better suited for larger enterprises with multiple founders.
Any individual, whether Indian or foreign, who is over 18 years old and not disqualified under the Companies Act, is eligible to be a director in a Private Limited Company.
No, Private Limited Companies cannot offer shares to the general public. They are limited to issuing shares to a specific group of individuals, usually existing shareholders or private investors.