How to Open a Private Limited Company?

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How to Open a Private Limited Company?

A private limited company is one of the most popular business structures in India. It is considered a separate legal entity from its owners and no-minimum paid-up capital is required. Private Limited Company registration in India is done with the Registrar of Companies (RoC) according to the provisions of the Companies Act, 2013. If you want to register a private limited company easily and smoothly, connect with Registrationwala company registration consultants.

What is a Private Limited Company?

A private limited company is a business entity which is held under private ownership. The liability arrangement in a pvt ltd is limited liability, wherein the shareholders’ liability is limited to the number of shares held by them. 

As soon as a private limited company is incorporated, it becomes an independent legal structure. To form this company in India, a minimum two and a maximum of 200 shareholders are required. The shareholders in a pvt ltd can be natural persons or companies (including foreign companies.)

Compared to sole proprietorship or partnership firms, private limited companies are less riskier for shareholders. While sole proprietorships and partnership firms come with unlimited liability, private limited companies offer the feature of limited liability.

Key Advantages of Private Limited Company

A private limited company offers numerous advantages. By looking at the key advantages of this business structure, you can understand why getting your business registered as a private company is a great idea.

• A private limited company can own a property in its name. Certain other business structures, such as sole proprietorship and partnerships do not allow this. 

• The company's debts are subject to "limited liability" for shareholders. This implies that, provided no personal guarantees have been signed, they are only liable for business obligations up to the value of shares owned by them.

• This type of company has ‘perpetual succession’, meaning it continues to have uninterrupted existence until it is legally dissolved. 

• A private limited company has the capacity to sue and be sued. To sue is to file a lawsuit in a court of law or to start legal procedures against someone. A firm, being a separate legal entity, has the right to sue and be sued in its own name, just as an individual can bring a lawsuit in his/her own name against another person’s name.

• Shareholders of eligible startups registered as private limited companies may take advantage of three consecutive financial years as tax holidays under Section 80IAC of the Income Tax Act. 

Documents Required for Private Limited Company Registration

In order to incorporate a private limited company, make sure you fulfill the document checklist for private limited company. The following documents must be submitted with the RoC for pvt ltd company registration:

• PAN cards and identity proof of directors.

• Address proof (Aadhar card, voter ID, etc.).

• Proof of registered office (electricity bill, rental agreement, etc.).

• Articles of Association (AOA) and Memorandum of Association (MOA).

• Declaration by directors and subscribers.

• NOC from the landlord.

• Digital signatures of directors and shareholders.

• Director identification number (DIN)

• If the director/subscriber is a foreign national, then his passport and address proof such as driving license, resident card or bank statement are required.

• Board resolution authorizing investment of the foreign national in the company is also required.

Step-by-Step Process to Register a Private Limited Company 

Step 1. Choose a Unique Business Name

Before you register your company, you need to choose a unique name for your company, which reflects its identity and vision. While choosing the name, you must ensure that it is not already in use by another company or trademarked by someone. 

To check name availability, you can visit the official Ministry of Corporate Affairs (MCA) company registration portal or check out Registrationwala’s company search tool.

Step 2. Obtain Digital Signature Certificate (DSC)

One of the most important steps in the private limited company registration process is obtaining a digital signature certificate (DSC) as a director or shareholder. DSC is issued by the controller of certification agencies. 

In order to obtain this certificate, essential details must be provided such as passport-sized photos, PAN, Aadhaar Card, phone number, and email address. If the director or shareholder is a foreign national, they should also furnish notarized and apostilled documents.

Step 3. Apply for DIN (Director Identification Number) 

The full form of DIN is the director identification number. Every individual in India is required to have a DIN, in order to be a company's director. 

To apply for DIN, DIR-3 form must be submitted on the MCA portal, along with identity proof, address proof and photograph of the company’s director. To Learn more about DIN, click here

Step 4. Name Approval for Company in SPICe+ Part A

To secure the name you’ve chosen for your company, you must begin by completing the SPICe+ Part A form. 

This includes selecting the company type, class, category, and sub-category, specifying the primary division of industrial activity and offering a detailed description of the business. You'll be required to propose two names for approval. 

Step 5. Filling out Company Details in SPICe+ Part B

In SPICe+ Part B form, you must provide comprehensive information related to the company’s capital, registered office address, details of the subscriber and directors, stamp duty, PAN and TAN application, and all the necessary attachments required for company registration in India. 

Step 6. Preparation and Submission of Incorporation Forms

Now, in this step, you must draft the memorandum of association and articles of association which define the company's constitution, rights, duties, powers, and operating framework. Before submitting these documents for MCA approval, the digital signatures from subscribers must be obtained. 

Apart from these documents, AGILE-PRO-S must be filed to register for GST, ESIC, EPFO, bank account, and a shop and establishment license.

Step 7. Certificate of Incorporation

The application processing time for company registration can take 2-3 weeks. Once the Registrar of Companies (RoC) approves the application, the company will be registered and a certificate of incorporation will be issued in its name. 

In the certificate, the date of incorporation and CIN will be mentioned.

Step 8. PAN and TAN Application

PAN stands for Permanent Account Number whereas TAN stands for Tax Deduction and Collection Account Number. 

Both these documents are required for your business. 

You can apply for PAN and TAN online through the MCA portal using the AGILE-PRO form and the payment gateway.

How We Can Help You Register Your Pvt Ltd Company

The company registration process requires you to ensure a lot of compliance. If you plan to get your private limited company registered with MCA all on your own, the process can be a bit challenging. However, if you connect with company registration experts at Registrationwala, the entire process will be easy and stress-free for you.

At Registrationwala, we have been offering our comprehensive support and professional guidance to ensure our clients can get their companies registered with the Registrar of Companies (RoC) smoothly. We will help you in preparing and filing all the documents required for private limited company registration. On your behalf, we’ll fill SPICe+ form for you and make sure all the details are filled correctly. Moreover, we’ll also help you in applying for GST registration and various other registrations/licenses required for conducting your business.

Our company registration services are affordable and at competitive rates. However, the experience we’ll provide you will be priceless. If you want to get your company incorporated as a private limited company in India, give us a call for free consultation!

FAQs about Private Limited Company Registration

Q1. Can a foreign national be a shareholder in a private limited company?

A. Yes, a foreign national can be an Indian private limited company’s shareholder.

Q2. Which form must be submitted on the MCA portal for private limited company registration?

A. SPICe+ form must be submitted on the MCA portal for registering a Pvt Ltd Company. The form is divided into two parts i.e., Part A and Part B.

Q3. What is the full form of SPICe+?

A. The full form of SPICe+ is Simplified Proforma for Incorporating Company electronically Plus.

Q4. What is the minimum and maximum number of shareholders allowed in a private limited company?

A. In a private limited company, a minimum of 50 and a maximum of 200 shareholders are allowed.

Q5. Private limited companies in India are registered according to which Act?

A. All the private limited companies in India are registered according to the provisions of the Companies Act 2013.

Also Read: Why LLPs May Be the Perfect Fit for Your Business?

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