Overview
Incorporating a Private Limited Company is the easiest and most reliable way to establish business in India. Mostly startups and new entrepreneurs opt for this form of registration due to its numerous advantages such as limited liability and the distinction of a separate legal entity for its shareholders and directors. This form of company registration is favored for its reputation and credibility in the market.
It is privately and collectively held by a small group of individuals and are incorporated under the Ministry of Corporate Affairs (MCA). This type of business entity offers limited liability protection for its shareholders, ensuring their personal assets are protected against the company’s liabilities. Shares in a Private Limited Company can only be traded privately, maintaining control within the group of shareholders.
Eligibility Criteria
- A minimum of two directors and maximum of 15
- Members cannot exceed 200
- At least one director must be a citizen of India
- There is no minimum cap on paid-up share capital
Advantages
1. Ease of Establishment
Establishing is relatively straightforward and can be completed within a week, making it an efficient choice.
2. Minimum Share Capital
There is no minimum cap on paid-up share capital so the business can be started with very less capital also.
3. Minimum Number of Shareholders and Directors
The company requires at least two shareholders and two directors, with at least one director being an Indian citizen.
4. Tax Benefits
Private limited companies enjoy various tax benefits, including eligibility for deductions, exemptions, and incentives. Additionally, the tax rates for private limited companies are often more favorable compared to other business structures.
5. Ease of Funding:
Raising capital by issuing shares to investors, venture capitalists, or angel investors is easier. This structure attracts external investment.
6. Easy Exit Plan:
It has an Exit plan through sale or dilution of equity of the company.
7. Liabilities of a Private Limited Company
- A private limited company must hold an annual board meeting.
- Filing annual returns with the Ministry of Corporate Affairs (MCA) is mandatory.
- An annual account audit by a Chartered Accountant (CA) is required.
- The company must file its annual return with the Income Tax Department.
Documents Required
In order to register your private limited company, you need to provide proper identity and address proof. These documents are required for directors and shareholders of the company and will be submitted to the Ministry of Corporate Affairs (MCA) portal.
Identity and Address Proof of Directors & Shareholders
- Passport-size Photographs of the directors
- Copy of Aadhaar Card
- Copy of Driving License or Voter ID
- Copy of PAN Card
- Copy of bank statement or utility bill (not older than two months)
- Copy of Passport (in case of foreign national or NRI)
Address Proof of Registered Office
- Copy of electricity or any other utility bill (not older than two months)
- Rent agreement (if rented)
- No Objection Certificate (NOC) from the owner of the property
Registration Fees
The total cost of Private Limited Company registration in India, including government and professional fees depending upon the choices and structure we choose.
Time Required
On average, it takes around 7-8 working days to register a Private Limited Company in India, subject to document verification by the Ministry of Corporate Affairs (MCA).
Registration Process
Registering a company in India involves a straightforward five-step company registration process:
Step 1: Acquire a Digital Signature Certificate (DSC)
Every director and shareholder must secure a Digital Signature Certificate (DSC) issued by the Controller of Certification Agencies (CCA). This involves providing essential details such as passport-sized photos, PAN, Aadhaar Card, phone number, and email address. Foreign nationals should also furnish notarized and apostilled documents, if applicable.
Step 2: Director Identification Number (DIN)
Obtain a Director Identification Number (DIN) if you intend to be a director in the company. DIN is essential for directors and needs to be provided in the registration form.
Step 3: Name Reservation for the Company (SPICe+ Part A)
Begin by completing the SPICe+ Part A form to secure a unique company name. This entails selecting the company type, class, category, and sub-category, specifying the primary division of industrial activity, and offering a comprehensive business description. You'll need to propose two names for approval.
Step 4: Submission of Company Details (SPICe+ Part B)
Provide comprehensive information concerning capital, registered office address, subscriber and directors' details, stamp duty, PAN and TAN application, and necessary attachments.
Step 5: Preparation and Submission of Incorporation Forms (SPICe+ MOA and AOA)
Draft the Memorandum of Association (MOA) and Articles of Association (AOA) containing crucial company details. Obtain digital signatures from subscribers and professionals before submitting these documents to the MCA for approval.
Additionally, file the AGILE-PRO-S form to register for GST, EPFO, ESIC, a bank account, and a shop and establishment license (which may be state-dependent).
Certificate of Incorporation
Upon successful document verification, the MCA will issue the Certificate of Incorporation (COI) with the Company Identification Number (CIN), PAN, and TAN.
Register Your Company through Praman Advisors
Register your company through Praman Advisors, specializing in Private Limited Company Registration services in India, offering comprehensive guidance and support throughout the process. Our team of professionals provides expert consultation tailored to your specific requirements and business goals, aiding in selecting a unique and fitting name that aligns with ROC guidelines by conducting a name availability search and facilitating the reservation. We efficiently handle the compilation of necessary documentation, ensuring accuracy and compliance, and guide directors in obtaining essential certifications like the Digital Signature Certificate and Director Identification Number (DIN) for seamless registration. By choosing Praman Advisors, you can be confident that your registration process will be managed professionally and effectively, allowing you to focus on your business objectives while we address the legal requirements, thus embarking on your entrepreneurial journey with assurance.
