What is a Private Limited Company Registration
A private limited company, a privately held entity with limited liability, holds a prominent position among the nation’s preferred business structures. Its popularity can be attributed to the array of advantages it offers, including limited liability protection, ease of formation and maintenance, and its status as a distinct legal entity.
Various types of private limited companies
- Company with Limited Guarantee
The amount of guarantee specified in the Memorandum of Association limits the liability of members, which is invoked solely during winding up. - Firm Limited by Shares
Shareholders’ liability is capped at the nominal share amount detailed in the Memorandum of Association. - Unlimited Companies
In unlimited companies, members assume unlimited personal liability for the company’s debts and liabilities. Nonetheless, these companies retain their distinct legal existence, thereby protecting individual members from being sued.
Prerequisites for Registering a Company
- Board of Directors and Members
The Companies Act of 2013 stipulates that the registration of a Private Limited Company in India requires a minimum of two directors and 200 members. These directors must hold a Director Identification Number (DIN) issued by the Ministry of Corporate Affairs (MCA). Furthermore, it is obligatory for at least one director to be an Indian resident who has resided in India for a minimum of 182 days in the previous calendar year. - Firm Name
The selection of a name for a private limited company requires careful consideration of two factors. One of these factors is that the chosen name should clearly indicate the principal activity of the business. - Address for the Registered Office:
Once the company registration is complete, the company needs to furnish the company registrar with the permanent address of its registered office. This is where all the business operations take place and where all the important company documents are kept.
Registering a Company: A Step-by-Step Guide
The process of registering a company consists of four easy-to-follow steps.
- Obtain a DSC (Digital Signature Certificate).
The Controller of Certification Agencies (CCA) mandates that all directors and shareholders obtain a Digital Signature Certificate (DSC) for authentication purposes. To obtain the DSC, individuals must provide essential details such as passport-sized photos, PAN card, Aadhaar Card, phone number, and email address. Additionally, foreign nationals should furnish notarized and apostilled documents, if applicable.
- Director Identification Number (DIN)
To fulfill your ambition of being a director in the company, it is essential to obtain a Director Identification Number (DIN). This indispensable number must be provided in the registration form.
- Company Name Reservation (SPICe+ Part A)
Get started by completing the SPICe+ Part A form to secure a distinctive company name. This involves selecting the category of company, division, type, and sub-tier, revealing the essential distribution of industrial endeavor and a comprehensive business explanation. Two names should be put forward for verification.
- Company Details Submission (SPICe+ Part B)
In order to comply with the Companies, Act 2013, it is imperative to provide a comprehensive overview of the capital, registered office address, subscriber and directors’ details, stamp duty, PAN and TAN application, and the required attachments. Furthermore, it is essential to obtain digital signatures from assisting professionals to ensure the accuracy and legality of the process.
- Prepare and Submit Incorporation Forms (SPICe+ MOA and AOA)
Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) which consist of vital company details. Prior to submitting these documents to the MCA for approval, it is necessary to obtain digital signatures from subscribers and professionals. Moreover, don’t forget to complete the AGILE-PRO-S form to enroll for GST, EPFO, ESIC, a bank account, and a shop and establishment license.
Certificate of Incorporation
Once the document authentication procedure is complete, the MCA will grant the Certificate of Incorporation (COI) along with the Company Identification Number (CIN), visage, and TAN.
Documentation Requirements
· Indian citizens
In order to proceed, please ensure you have a self-attested copy of your PAN card, a passport-sized photo, your Aadhaar Card, and valid proof of identity and address.
· For International Citizens
Legalized paperwork, photo in passport size, current passport, and verification of address.
Documentation for the registered office:
Please ensure that you provide the necessary documents, including a proof of business address, a copy of the rent agreement (if applicable), and the owner’s no objection certificate.
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FAQ’s for Private Limited Company Registration
To form a private limited company, specific prerequisites need to be fulfilled, which include:
- All directors are required to have a Directors Identification Number (DIN).
- It is necessary to have at least two directors and two shareholders involved.
- The membership count should fall within the range of 2 to 200 individuals.
- Directors/shareholders should attach a copy of their PAN card, and NRI subscribers must include a Passport copy.
According to section 2(56) of the Companies Act 2013, the Memorandum of Association (MOA) is a legally defined document that forms the very basis of a company. It delineates the company’s framework, powers, and goals.
The management of the company is governed by the Articles of Association (AOA), which is defined in section 2(5) of the Companies Act. These articles encompass all the necessary rules and regulations.
SPICe serves as an eform, while SPICe+ is an integrated Web form that offers 10 services from 3 Central Govt Ministries & Departments (Ministry of Corporate Affairs, Ministry of Labour & Department of Revenue in the Ministry of Finance) and One State Government (Maharashtra). This simplifies procedures, saves time, and reduces costs for starting a business in India. SPICe+ is part of the Government of India’s initiatives to enhance Ease of Doing Business (EODB). Previously, SPICe INC 32 was used for company incorporation until February 15, 2020. Now, all new companies must file the SPICe+ form on the MCA portal.
The registration cost for a private limited company in India ranges from Rs.6,000 to Rs.30,000, depending on variables such as the number of directors, members, and authorized share capital.
Once a Private Limited Company is incorporated, the Board of Directors must ensure the appointment of a practicing Chartered Accountant within 30 days.
The ITR returns for Private Limited Companies in India must be filed each year using Form ITR 6.
Indian companies are obligated to file the MCA annual return, which consists of AOC 4 and MGT 7 forms, on a yearly basis.
It is technically possible to run a startup without registering a company, but it is usually advisable to register your business entity for legal and operational purposes. Registering a company gives you a separate legal identity, limited liability protection, access to funding, and credibility in the market.