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Private Limited Company Registration in India
Private Limited Company Registration in India
Setting up a business in India typically involves selecting the right business structure, and many entrepreneurs prefer registering a private limited company due to its numerous advantages. This company structure provides limited liability protection to shareholders while imposing certain restrictions on ownership. Unlike LLPs, where partners manage the business directly, a private limited company separates ownership from management, with distinct roles for directors and shareholders.
At IndiaFilings, we offer a cost-effective solution for private limited company registration in India, ensuring seamless compliance with the Ministry of Corporate Affairs (MCA) guidelines.
What is a private limited company?
- Limited Liability Protection: Shareholders’ liability is restricted to their shareholding, protecting their personal assets from the company’s liabilities.
- Separate Legal Entity: The company has its own legal identity, allowing it to own property, sign contracts, and initiate legal proceedings under its name.
- Minimum Shareholders: Requires at least two shareholders, with a maximum of 200.
- Minimum Directors: At least two directors are required, one of whom must be an Indian citizen.
- Share Capital: Requires a minimum paid-up capital of ₹1 lakh (or higher if specified).
- Firm Name: The name of the company must end with “Private Limited.”
- Share Transfer Restrictions: The transfer of shares is limited, usually requiring Board approval.
- Public Invitation Prohibition: The company cannot invite the public to subscribe to its shares.
- Compliance Requirements: Must adhere to financial record-keeping, annual general meetings, and filing annual returns with the Registrar of Companies (ROC).
Types of Private Limited Companies:
- Company Limited by Shares: Liability of shareholders is restricted to the value of shares.
- Company Limited by Guarantee: Liability is limited to the amount guaranteed in the Memorandum of Association, activated only during winding up.
- Unlimited Companies: Members face unlimited liability for the company’s debts but remain legally distinct from the company.
Advantages of a Private Limited Company
- Limited Liability: Shareholders’ assets are protected from the company’s liabilities.
- Separate Legal Identity: A private limited company can own property, enter contracts, and initiate legal actions.
- Continuity: The company continues to exist despite changes in shareholders or directors.
- Funding Flexibility: Easier to raise capital through shares, attracting investors.
- Tax Benefits: Private limited companies may avail themselves of various tax advantages.
- Credibility: The “Pvt. Ltd.” tag instills trust among customers and partners.
Disadvantages of a Private Limited Company
- Compliance Burden: Involves stricter regulatory requirements and financial disclosures.
- Complex Setup: Requires more steps and higher costs than simpler business structures.
- Restricted Share Transfers: Limited to 200 shareholders, and shares can only be transferred with Board approval.
- Public Disclosure: Financial data must be publicly disclosed, impacting privacy.
- Exit Complications: Selling or exiting the company is more complex compared to other business structures.
Requirements for Registering a Company in India:
- Directors and Members:
- A minimum of two directors and 200 members are required.
- Directors need a Director Identification Number (DIN) from the MCA.
- At least one director must reside in India for at least 182 days in the previous year.
- Company Name:
- The name should reflect the company’s primary activity.
- Registered Office Address:
- After registration, the company must provide a permanent registered office address to the ROC, where all official records are maintained.
Company Registration Process
Step 1: Digital Signature Certificate (DSC)
- Obtain DSC for all directors and shareholders by providing personal details like PAN, Aadhaar, and passport-sized photos.
Step 2: Director Identification Number (DIN)
- Apply for DIN for every director.
Step 3: Name Reservation (SPICe+ Part A)
- Submit the SPICe+ Part A form to reserve a unique company name.
Step 4: Company Details (SPICe+ Part B)
- Provide details like capital, registered office, directors, and PAN/TAN applications.
Step 5: Incorporation Forms (SPICe+ MOA and AOA)
- Submit the Memorandum of Association (MOA) and Articles of Association (AOA) digitally, alongside AGILE-PRO-S forms for GST, EPFO, and ESIC registration.
Document Checklist:
For successful registration, ensure the following documents are ready:
- For Indian Nationals: PAN card, passport-sized photo, Aadhaar, and address proof.
- For Foreign Nationals: Notarized documents, passport, and proof of address.
- Office Documents: Proof of registered office address and no-objection certificate from the landlord.
Post-Registration Compliance
After incorporation, private limited companies must adhere to ongoing legal compliance, such as maintaining financial records, conducting meetings, and submitting annual returns.
Register Your Company through Allycon
Allycon offers comprehensive support for Private Limited Company Registration in India. Our expert team manages every aspect, from name reservation to the submission of all required documents, ensuring full compliance with MCA regulations. With our professional guidance, you can effortlessly register your company and focus on expanding your business.
Begin your entrepreneurial journey with confidence, powered by Allycon’s seamless registration services!
Related Business Registrations
In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.
