Private Limited Company
A private limited company is a company privately held for small businesses. This type of business entity limits owner liability to their shareholdings, the number of shareholders to 200, and restricts shareholders from publicly trading shares.
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What are the advantages of Private Limited Company Registration in India?
- Limited risk to personal assets – The shareholders of a private limited company have limited liability. This means that as a shareholder you will be liable to pay for company’s liability only to the extent of the contribution made by you. The shareholders do not have any personal liability and hence need not pay for the company’s liability out of their own assets.
- Legal Entity – A PLC has a separate legal entity different from you. This means that the Company is responsible for the management of its assets and liabilities, debtors and creditors. You will not be held responsible for the losses of the company. So, the creditors cannot proceed against you to recover the money.
- Raising Capital – Even though registering a PLC comes with compliance requirements, it is preferred by entrepreneurs as it helps them raise funds through equity, expand and at the same time limits the liability.
- Creates confidence – Companies in India are registered with the Registrar of companies(ROC) under the Companies Act 2013. Anyone can check the details of the company through the Ministry of Corporate Affairs (MCA) portal. Also, details of all the directors are provided while the formation of the company. Hence a PLC form of business structure is trusted more.
5. Uninterrupted existence.– A company has ‘perpetual succession’, i.e. continue or uninterrupted existence until it is legally dissolved. A company, being a separate legal person, is unaffected by the death or cessation of any member but continues to be in existence irrespective of the changes in membership.
What are the requirements to start a Private Limited Company in India?
- As mandated by the companies act 2013, a private limited company formation must have a minimum of two directors registered. The maximum number can be 200.
- In addition, director members must have a Director Identification Number (DIN) and one of them must be a resident of India. Furthermore, the authorized capital required to form a private limited company is a minimum of Rs 1 Lac.
Steps To Be Taken To Incorporate A New Company
- Obtain DSC(Digital Signature Certificate) Digital signatures are required to file the forms for company formation. The registration process is online and the forms require a digital signature. DSC is mandatory for all subscribers and witnesses in the memorandum and articles of association. You can get your DSC online in just two days from here.
These can be obtained from the Ministry of Corporate Affairs (MCA) website.
- Choose a unique name: Choose a unique name for the company and check if it’s available on the MCA website.
- Select, in order of preference, at least one suitable name upto a maximum of six names, indicative of the main objects of the company.
- Ensure that the name does not resemble the name of any other already registered company and also does not violate the provisions of emblems and names (Prevention of Improper Use Act, 1950) by availing the services of checking name availability on the portal.
- Once you’ve decided on a name for your business, also describe the significance of the name in one or two sentences. It would need to be entered into the form.
While applying, ensure the following:
The company’s proposed name has not already been taken on mca.gov.in. Furthermore, check so that there is no registered trademark in the same name by checking at ipindia.nic.com.
The first half of the name is unique. Avoid geographical references, adjectives, abbreviations, and generic terms. The second half amply clears the sector you’re in.
- File for incorporation: File for incorporation with the Registrar of Companies (ROC) within whose jurisdiction the registered office of the company is situated.
- Apply to the concerned RoC to ascertain the availability of name in eForm1 A by logging in to the portal. A fee of Rs. 500/- has to be paid alongside and the digital signature of the applicant proposing the company has to be attached in the form. If proposed name is not available, the user has apply for a fresh name on the same application.
- After the name approval the applicant can apply for registration of the new company by filing the required forms (that is Form 1, 18 and 32) within 60 days of name approval
- e-MoA (INC-33) and e-AoA (INC-34)
e-MoA refers to an electronic Memorandum of Association and eAoA is electronic Articles of Association. These forms have been introduced to simplify the process of company registration in India. Memorandum represents the charter of the company while articles of association contain the internal rules and regulations of the company. Earlier memorandum of association and articles of association were required to be filed physically. But now these forms are filed online on MCA portal as a linked form with SPICe (INC-32). Both these forms must be digitally signed by subscribers to the Memorandum and Articles of Association.
- Arrange for the drafting of the memorandum and articles of association by the solicitors, vetting of the same by RoC and printing of the same.
- Arrange for stamping of the memorandum and articles with the appropriate stamp duty.
- Get the Memorandum and the Articles signed by at least two subscribers in his/her own hand, his/her father’s name, occupation, address and the number of shares subscribed for and witnessed by at least one person.
The firm’s goals are outlined in the MOA, while the laws and regulations that govern the company are outlined in the AOA. Together with the application for the formation of a business, certain documents must be submitted to the Registrar of Companies (ROC).
- Ensure that the Memorandum and Article is dated on a date after the date of stamping.
- Obtain any other necessary licenses and registrations: Depending on the nature of the business, the company may require additional licenses and registrations such as FSSAI license, trademark registration•
- Login to the portal and fill the following forms and attach the mandatory documents listed in the eForm
- Declaration of compliance – Form-1
- Notice of situation of registered office of the company – Form-18.
- Particulars of the Director’s, Manager or Secretary – Form-32.
Submit the following eForms after attaching the digital signature, pay the requisite filing and registration fees and send the physical copy of Memorandum and Article of Association to the RoC
- After processing of the Form is complete and Corporate Identity is generated obtain Certificate of Incorporation from RoC. The next step is to file the application for company registration along with the necessary documents. The application needs to be filed with the ROC. Once the application is filed, the ROC will review the application and issue a Certificate of Incorporation if everything is in order.
The Certificate of Incorporation is issued with PAN and TAN as allotted by the Income Tax Department. An electronic mail with a Certificate of Incorporation as an attachment along with PAN and TAN will also be sent to the applicant.
How We Can Help?
Advising on the legal structure: We can provide guidance on the legal structure of the company, including the various types of companies that can be registered, the advantages and disadvantages of each type, and which structure would be best suited for the specific business needs.
Preparation of documents: We can prepare the necessary legal documents required for the registration process, including the Memorandum of Association (MoA), Articles of Association (AoA), and other required documents.
Verification of documents: We can verify the accuracy of the documents prepared and ensure that all the required documents are in order before submitting them to the Registrar of Companies (ROC).
Liaison with ROC: We can liaise with the ROC on behalf of the company, ensuring that all the necessary formalities are completed, and any queries or issues raised by the ROC are addressed promptly.
Compliance with legal requirements: We can advise on the various legal requirements that need to be complied with, such as obtaining the Director Identification Number (DIN) and Digital Signature Certificate (DSC), paying the requisite fees, and obtaining necessary licenses and registrations.
Post-registration compliance: We can provide guidance on the various compliance requirements that need to be fulfilled post-registration, such as filing annual returns, maintaining statutory registers, and conducting board meetings.
We can provide end-to-end assistance in registering a private limited company, ensuring that the process is completed smoothly and in compliance with all legal requirements.
Proof of identification of all the company’s directors and shareholders (partners in case of LLP). Any one of the below documents can be submitted as proof of identification:
Pan card- Aadhar card -Driving license- Passport
Proof of address of all the directors and shareholders (partners in case of LLP). Any one of the below documents can be submitted as address proof:
Latest telephone bill (not older than 2 months)
Latest electricity bill (not older than 2 months)
Bank account statement having address
DIN (DPIN in case of LLP) and DSC of all the directors.