Private Limited Company Registration
Private Limited Company Registration Starting from €999 + Government Fees
Get expert help on Indian Company Registration including SPICe-INC-32, eMoA-INC – 33 and as per eAOA-INC-34 documents and DSC requirements of MCA, everything can be done for your company in one go.
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Eligibility Criteria for Private Limited Company Online Registration
As per MCA guidelines, a private limited company must be registered in the name of at least two directors and shareholders. While shareholders can be individuals or legal entities, directors must be individuals. They also need to have a permanent address in India. The following conditions need to be fulfilled while applying for Private Limited Company registration:
The minimum age of the applicant must be eighteen years
The applicant must be a citizen of India or a resident of India
Age must be between 200 and 300 years Membership
Directors or shareholders must be 2
Checklist for Private Limited Company Registration
There are checks that need to be met for registration of a company under MCA. Here is an overview of the list of private limited companies:
Minimum 2 directors
Director and shareholders can be the same person
All directors must have DIN and DSC
Must have minimum authorised share capital
br>Have minimum paid-up capital
Draft, MoA and Articles of Association<br< b=””></br<> >Details of the company’s operating address are required
NOC and agreement with landlord.
Types of Private Limited Companies in India
A Private Limited Company (Pvt. Ltd.) is one of the most popular business structures in India, offering benefits like limited liability, legal entity status, and ease of raising capital. Depending on the specific needs of the business, there are different types of private limited companies that can be incorporated under the Companies Act, 2013. Below are the main types:
1. Company Limited by Shares
This is the most common type of private limited company. In this structure, the liability of the shareholders is limited to the value of the shares they hold. If the company faces financial loss or debts, shareholders are only responsible for the unpaid amount of their shares.
- Key Features:
- Shareholders cannot be forced to pay more than the face value of their shares.
- Easy to raise capital through issuing shares.
- Suitable for businesses planning to scale.
Example:
A shareholder owning ₹10,000 worth of shares is liable for a maximum of ₹10,000, even if the company incurs larger losses.
2. Company Limited by Guarantee
In a company limited by guarantee, the liability of members is limited to the amount they guarantee to contribute if the company is wound up. This structure is typically used for non-profit organizations or charities where members act as guarantors rather than shareholders.
- Key Features:
- No share capital, and members do not own shares.
- Members’ liability is limited to a predetermined amount, often nominal.
- Commonly used by clubs, associations, and non-profits.
Example:
Members agree to contribute ₹1,000 each in the event the company is dissolved. Their liability is restricted to this guaranteed amount.
3. Unlimited Company
In an unlimited company, the liability of shareholders or members is not limited to the value of their shares. In case of debt or bankruptcy, shareholders are liable to cover all losses, potentially using their personal assets.
- Key Features:
- No limit on shareholders’ liability.
- Less common due to high-risk exposure.
- Suitable for companies with low-risk operations or tight control over financial liabilities.
Example:
If an unlimited company incurs a significant loss, shareholders may be required to pay more than their share value, even from their personal finances.
Private Limited Company Registration Fees
There are many factors that determine the total cost of setting up a private limited company in India. Fees like stamp duty and government levies need to be paid. If you hire a professional, we will assess the professional fees. In addition, applications for DSC, DIN, tax registration, PAN, TAN and GST registration also need to be considered. Vakilsearch provides an all-in-one platform for online private limited company registration in India. You can start the registration process by choosing from our affordable packages according to your needs.
Benefits of a Private Limited Company
A Private Limited Company (Pvt. Ltd.) is one of the most popular business structures in India, offering several advantages for entrepreneurs looking to scale their operations. It combines the flexibility of a partnership with the limited liability of a company, making it ideal for businesses aiming for growth and investment.
1. Limited Liability Protection
In a private limited company, the liability of the shareholders is limited to the amount of shares they own. This means that personal assets of the shareholders are protected, and they are not held responsible for the company’s debts beyond their investment in the company.
- Why It Matters: In case of business losses or lawsuits, shareholders’ personal properties and wealth are safeguarded from creditors and legal claims.
2. Separate Legal Entity
A private limited company is recognized as a separate legal entity from its shareholders and directors. It has its own legal standing, meaning it can own property, sue, or be sued in its own name.
- Why It Matters: This creates a distinct boundary between the owners and the company, providing a higher level of legal protection and continuity in case of ownership changes.
3. Perpetual Succession
A private limited company enjoys perpetual succession, which means that the company’s existence is not affected by changes in ownership or the death of shareholders or directors. The company will continue to operate as long as it complies with regulatory requirements.
- Why It Matters: This ensures stability and long-term continuity of the business, making it more attractive to investors and partners.
4. Ease of Raising Capital
A private limited company can raise capital more easily compared to other business structures. It can issue shares to investors, including venture capitalists and private equity firms, without diluting control too much.
- Why It Matters: This structure makes it easier to raise funds for business expansion or new projects. It also improves the company’s creditworthiness with banks and financial institutions.
5. Tax Benefits
Private limited companies enjoy lower tax rates than partnerships and sole proprietorships. They can also take advantage of a variety of tax deductions and exemptions on business expenses, such as research and development, depreciation, and donations.
- Why It Matters: The reduced corporate tax rates (currently 25% for companies with turnover up to ₹400 crore) and other tax incentives can significantly lower your overall tax burden, boosting profitability.
6. Credibility and Brand Value
Being registered as a private limited company enhances the credibility of your business. Clients, investors, suppliers, and customers often view private limited companies as more trustworthy and reliable due to the stricter compliance and reporting requirements.
- Why It Matters: A private limited company is more likely to win contracts, attract investment, and build long-term relationships with stakeholders.
7. Flexibility in Ownership and Management
In a private limited company, the ownership and management are separate. While shareholders own the company, they may appoint professional managers and a board of directors to run day-to-day operations.
- Why It Matters: This separation allows the business to function smoothly, even if the owners are not actively involved in management, ensuring professional management and operational efficiency.
8. Easy Transfer of Ownership
The shares of a private limited company can be easily transferred to another person or entity, ensuring smooth changes in ownership or succession planning. This is a significant advantage compared to sole proprietorships or partnerships, where transferring ownership can be complex.
- Why It Matters: This makes it easier to exit the business, bring in new partners, or transfer ownership to family members or other shareholders.
9. Ability to Scale and Expand
A private limited company has the legal framework to expand rapidly, making it easier to scale operations, add shareholders, or venture into new markets. It can also set up subsidiaries or acquire other companies to facilitate growth.
- Why It Matters: This structure allows businesses to think long-term and grow without facing limitations that other business types may encounter.
10. Easier Access to Loans and Funding
Banks and financial institutions prefer lending to private limited companies because of their legal structure, transparency, and accountability. Additionally, private limited companies have more funding options, including issuing equity shares, preference shares, and debentures.
- Why It Matters: With access to better credit facilities and multiple funding avenues, a private limited company can ensure sufficient liquidity for operations and expansion.
Steps to Register Your Private Limited Company
Starting a Private Limited Company (Pvt. Ltd.) is a great way to establish a legally recognized business entity with numerous benefits such as limited liability protection and access to better funding options. Below are the steps to register your Private Limited Company in India:
Step 1: Obtain Digital Signature Certificate (DSC)
The first step to registering your company is obtaining a Digital Signature Certificate (DSC) for the proposed directors. Since the registration process is fully online, the directors will need DSCs to sign and file the documents electronically.
- How to get it: You can obtain DSC from government-authorized agencies such as eMudhra or Sify. Class 2 or Class 3 DSC is required for company registration.
Step 2: Apply for Director Identification Number (DIN)
Each director of the company must have a Director Identification Number (DIN), which is a unique identification number required for managing and running the company.
- How to apply: You can apply for DIN through the SPICe+ Form (Simplified Proforma for Incorporating a Company Electronically) when filing for company registration. If the directors already have a DIN, they don’t need to reapply.
Step 3: Name Reservation (Run Form)
Next, you need to select an appropriate name for your company and get it approved by the Ministry of Corporate Affairs (MCA). The company’s name must be unique and not identical to an existing company or trademark.
- How to do it: File the RUN (Reserve Unique Name) form on the MCA portal, proposing two names in order of preference. Once approved, the name is reserved for 20 days within which you should complete the registration process.
Step 4: Prepare and File the SPICe+ Form
Once your company name is approved, the next step is to prepare and file the SPICe+ Form (INC-32) on the MCA portal. The SPICe+ Form is a simplified integrated form that handles:
- Company name approval.
- Application for incorporation.
- Application for PAN and TAN (Tax Account Number) registration.
You’ll need to submit the Memorandum of Association (MOA) and Articles of Association (AOA), which define the company’s objectives and rules of operation.
- Documents Required:
- PAN card and Aadhaar card of the directors and shareholders.
- Proof of address (electricity bill, gas bill, etc.).
- Passport-sized photographs of directors.
- Proof of registered office (rent agreement or ownership proof, and utility bills).
- Directors’ consent forms (DIR-2).
- NOC (No Objection Certificate) from the property owner (if applicable).
Step 5: Pay the Registration Fees
You will need to pay the required registration fees based on your company’s authorized share capital. The MCA portal will calculate the fees automatically based on the capital you declare during registration.
Step 6: Certificate of Incorporation (COI)
After submitting the SPICe+ form and other documents, the Registrar of Companies (RoC) will review the application. If all details and documents are in order, the RoC will issue the Certificate of Incorporation (COI), which confirms the official existence of your company.
- Includes PAN and TAN: Along with the COI, you will automatically receive the company’s Permanent Account Number (PAN) and Tax Deduction Account Number (TAN).
Step 7: Open a Business Bank Account
Once you have the Certificate of Incorporation, the next step is to open a business bank account in your company’s name. You will need this account to manage the company’s finances and carry out any business transactions.
- Documents Required:
- Certificate of Incorporation (COI).
- Memorandum of Association (MOA) and Articles of Association (AOA).
- PAN card of the company.
- Authorized signatory ID proof and address proof.
Step 8: Register for GST (If applicable)
If your company’s annual turnover exceeds ₹20 lakh (₹10 lakh for special category states), or if your business involves inter-state supply of goods or services, you will need to register for GST (Goods and Services Tax).
- How to do it: You can register for GST on the GST portal by providing your company’s details, Certificate of Incorporation, and PAN.
Step 9: Compliance Requirements
Once your Private Limited Company is incorporated, there are several ongoing compliance requirements you must follow:
- Annual Filing: File your company’s financial statements and annual returns with the RoC every year.
- Board Meetings: Conduct a minimum of four board meetings every year.
- Statutory Audits: Appoint an auditor within 30 days of incorporation and conduct an audit of the company’s financials annually.
- Income Tax Returns: File annual income tax returns for the company by the 30th of September each year.
Why Choose Vakiltalks for PVT Ltd Company Registration ?
Choosing Vakiltalks for PVT Ltd Company Registration ensures a good and reliable experience. With a clear commitment, guidance on complex government duties and stamp duty, and a friendly approach, our experts will make the registration process stress-free. The efficiency and attention to detail of our professional team gives us confidence to meet your company’s needs. Choose PVT Ltd company registration with the ease of expertise and efficiency of Vakiltalks.
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