A Complete Guide on Registering Your Company as a Private Limited Company

A Complete Guide on Registering Your Company as a Private Limited Company

A Complete Guide on Registering Your Company as a Private Limited Company

We are in an era where people are desirous of starting their own ventures rather than doing a job. Especially when we talk about India, it's like opening a business has become a new trend.

Furthermore, people in India have several options out of which they can choose any one business structure. Private Limited Company Registration is one such business registration which is much preferred by the start-ups.

Reasons why people choose to register their business as Private Limited Company are many. Some of them include a simpler registration process, easy to form, etc. Reports say that more than 90% start-ups in India choose private limited company registration over other business forms.

So, in this piece of article, we will detail the several aspects of a private limited company, including its registration process. Let's get started-

Crucial Insight on Private Limited Company Registration

Private Limited Company Registration is the most prominent business form in India, which is done with the MCA (Ministry of Corporate Affairs) under the Companies Act, 2013.

Private Limited Companies are easy to start; start-ups can protect their personal assets with limited liability, reduced audit risk, and tax, high chances of securing funds through a bank or other resources.

As a result, start-ups are more inclined toward starting their company as a private limited. Apart from these, there are various other advantages people can avail with such business structures. We have described the same later in the blog.

What are the minimum eligibility criteria for obtaining private limited company registration in India?

Anybody who is desirous of registering his/her company as private limited in India must fulfill the following minimum criteria:

  • It must have at least two directors and a maximum of 15 directors in the company;
  • One of the directors of the company should compulsorily be an Indian resident;
  • No minimum share capital is needed;
  • DSC and DIN for all the directors of the company.

Documents required for Private Limited Company Registration in India

Documents are the most important requirements for Company Registration. Therefore, if you’re willing to register, then you must submit the following documents:

From Shareholders and Directors of the Company

  • Copy of PAN or Passport as an identity proof;
  • Passport Size photographs;
  • Address proof such as Driving License, Election ID card, etc.
  • Notarized rent agreement, if any rental property used for the same, etc.

If the applicant is a foreign national (Self-attested)

  • Apostille and Notarized residential proof;
  • Apostille and Notarized Passport;
  • Notarized identity proof of the director(s)
  • If the applicant is outside the native country, then attested copy of VISA is necessary
  • If a foreign national resides in India, then an attested copy resident permit certificate is needed.

For the proposed registered address (Commercial/Residential)

  • No-Objection Certificate from the owner, if applicable;
  • Copy of Telephone Bill/Electricity bill/Bank statement.

Step-by-Step Procedure for Private Limited Company Incorporation

For private limited company registration, one needs to follow the steps as described below:

Step 1: Apply for DSC

Digital Signature Certificate (DSC) is required to be obtained for all the directors. One can apply for the same on the MCA with the concerned authority. Later on, this DSC can be used for several other purposes.

Step 2: Get your company name approved

The second most essential step to company registration is choosing a unique company name. The name should be such that it adds value to the company and its work. Moreover, it must not match with any of the existing company names.

One can opt for company name approval through RUN service, which stands for Reserve Unique Name. Here, you can propose a maximum of two names. Then, based on the eligibility and availability of the name, the RoC (Registrar of Companies) will approve any one of them.

After the name approval, the applicant needs to file the SPICe form within 20 days.

Step 3: Filing SPICe or INC-32 for Company Registration

SPICe stands for Simplified Proforma for Incorporating Company Electronically. Basically, it’s a form for company incorporation. Apart from this, SPICe is a single form that can be used for several purposes such as company name approval, obtaining DIN, company’s incorporation, CIN, PAN & TAN, etc.

So, for obtaining company registration, you need to file SPICe along with the required documents, including those described below:

  • SPICe MOA (Memorandum of Association);
  • SPICe AOA (Articles of Association);
  • INC 35 AGILE ;
  • DIR-2, a declaration from Directors along with the identity and residential proof.

Step 4: The issuance of Certificate of Private Limited Company Registration

After the submission of documents and SPICe, the Registrar will inspect them and find if they are valid and complete. If the RoC is satisfied, he will grant the certification of company registration

On the receipt of the certificate of the company incorporation, you are supposed to open a bank account in the company's name. Then, you can initiate the company's process.

Advantages of starting a Private Limited Company in India

A private limited company is considered as one of the best business forms in India because of the following benefits that it offers to the applicant:

  • Separate Legal Entity: A company stands as a separate legal entity from its members. It implies that in case of any debt or loss, the members of the company won’t have to incur the loss and debts.
  • Limited Liability: The liability of the members of the company is limited to a certain extent, which is up to the face value of shares taken up by the shareholders.
  • Perpetual Succession: It means the company can continue even after the death of its member or in case of any illness, etc. Any modifications within the management of the company don't affect the business's identity.
  • Easy Transferable Ownership: The shares and other interest of the company’s members is a movable property. And hence, those are transferable in a way as specified in the Articles of Association of the company.
  • Easy to raise funds: Businesses such as sole proprietorship or partnership firms find it difficult to raise funds. However, private limited companies have got the advantage of raising funds through several channels.
  • Eligible to register under Startup India Campaign: The Startup India campaign offers several benefits and exemptions to the companies registered under it. Being a private limited company, you can enroll your company under this campaign and avail several advantages. There's a tax exemption for three consecutive years for such companies.

About Riya Sharma

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Swarit Advisors Is Technology Motivated Platform Establishing The Specialized Legal & Financial Advisory Services In India. We Are Dedicated To Helping Startups And MNC In Solving Legal, Taxation And Compliance Related To Starting And Running Their Business Around The World.

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