A Private Limited Company is a privately held entity registered under Indian Companies Act, 2013 or any previous Companies Act. As suggested by the term “Limited” in the name itself, the liability of the members i.e. owner is limited to a certain extent. Also, there are certain restrictions laid combined with privileges offered. Shareholders: Minimum number of shareholders required to start a Private Limited Company is two while the upper limit of members is two hundred, as per the Companies Act, 2013.
The number of directors: A Private Limited Company needs a minimum of two directors. Out of the two, at least one director on the board of directors must have stayed in India for a total period of not less than 182 days in the previous calendar year. The directors and the shareholders can be the same people.
Capital: Minimum share capital required is only Rs. 1, 00,000 (One Lakh).
Limited liability: The liability of each shareholder or member is limited. This means that if the company runs into a loss, the company shareholders are liable to sell their company shares to clear the debt or liability. The individual or personal assets of shareholders or members are not at risk.
Perpetual succession: As per company law, perpetual succession means that the company continues its existence even any owner or member dies, goes bankrupt, exits from the business, and transfers his shares to another person.
Prospectus: Prospectus is a detailed statement that must be issued by a company that goes public. However, Private Limited Companies do not need to issue a prospectus because the public is not invited to subscribe for the shares of the company.
- Before we begin with the registration, our team shall conduct a name check on the availability of the proposed company name and then select up to six names in order of preference.
- Once the proposed name is approved or is available, we shall apply for company registration within 60 days of the name approval.
- Digital Signature Certificate (DSC) will be required for form submission; it is advisable to obtain DSC, if not available.
- Director Identification Number (DIN) is mandatory for all directors; it is advisable to obtain the DIN of a director, if not available.
- The next process would be a suitably drafted Memorandum of Association (MOA) and Articles of Association (AOA), duly stamped with payment of stamp duty and signed by at least two subscribers, witnessed by at least one person.
- Then Form 1 is filed for Declaration of Compliance and Form 18 is filed to provide notice of the situation of the registered office of the company and finally Form 32 is filed for providing details of Directors, Secretary, etc.
- After this, the Company is registered within 10 – 15 business days and a Certificate of Incorporation and Corporate Identification No (CIN) is issued.
- A short description of the company and the business.
- Name of the city where the registered office of the company is located.
- Ownership and sale deed (In case it’s your own premise).
- Identity proof of the Directors and Shareholders (PAN Card).
- Address proof of the registered office (Electricity Bill, Telephone Bill, etc.)
- Address proof of the Director or the Shareholder (Voter ID, Passport, Driving license, etc.)
- Occupation details of directors as well as shareholders.
- The email address of the directors and shareholders.
- Contact details of directors and shareholders.
- Passport size photo of directors and shareholders.
- In case the property is on rent then you need to submit a copy of the rental agreement with a No Objection Certificate (NOC) from the landlord.
- In the case of foreign nationals, Passport is mandatory, while any other government-issued
- ID (residence or citizenship card or driving license) and a bank statement or any utility bill in the name of the person will be required as address and residential proof. English
- Translation will be required in case if the documents are not in English.
1. What is a DSC?
DSC stands for Digital Signature Certificate, using which you can sign electronic documents. For the registration of a Private Limited Company, all documents needed are electronic; therefore, a DSC is required by the partners.
2. What are the qualifications required to become a director or shareholder in a Private Limited Company?
There is no specific qualification required to become a director or shareholder in a Private Limited Company. Any natural person can become a director or shareholder of the company.
3. Can one register a Private Limited Company on their home address?
Yes, one can register the company at their residential address. The only requirement is to submit a copy of the utility bill of the same.
4. What is a Director Identification number?
A Director Identification Number or DIN is an 8-digit unique identification number, which is allotted by the Central Government to each individual who wants to be a director of any company or who already is a director of any company. Once allotted, the DIN number has lifetime validity.
5. Once a company has been registered, is it possible to change its registered office?
Yes, a company can change its registered office by filing an appropriate form with the Registrar of Companies.
6. Can a Private Limited Company make Foreign Direct Investments in India?
7. What is meant by Limited Liability protection?
Limited Liability is a form of legal protection for shareholders and owners that prevents individuals from being held personally responsible for their Company debts or financial losses. By separating the finances of the owners and the business, the business becomes responsible for its liabilities, debts, and financial losses. This distinction creates legal protection for owners and shareholders, who are under no legal obligation to pay any debts or cover any losses if the business were to fail.
8. Is the trademark automatically protected on the registration of the company?
No, trademark registration is completely different from company registration. The incorporation of a Private Limited Company doesn’t provide trademark protection, which is required to be registered differently for protecting it.
9. Who is the Registrar of Companies (ROC)?
ROC is a Government Office with whom companies get registered. Every State has one ROC office except Maharashtra and Tamil Nadu where there are two ROC offices. In Maharashtra, companies are registered with Mumbai & Pune ROC. In Tamil Nadu, companies are incorporated at Chennai and Coimbatore ROCs. In all other States like Delhi, there is only one ROC office, like at Bangalore, Hyderabad, and so on.
10. Is Private Limited Incorporation to be renewed every year?
No. Once the company is formed, it will be valid until it is officially closed down by the owners. No renewal or fees is required. However, every year companies have to file very basic returns with the ROC office.
11. Does PF, GST is automatically applicable to Private Limited?
There is no automatic applicability. Provident Fund (PF), GST applicability is the same for all types of businesses like a sole proprietorship, partnership firms, and companies. These laws are applicable only after crossing certain threshold limits.
12. Is it mandatory to have some level of turnover to start Private Limited Company?
No, a Private Limited Company is one of the modes of doing business, which means it can be started from scratch. For that matter, even after incorporating a private limited, there is no obligation that the company must have sales or turnover.
13. What is the capital of the Company?
Capital means investment made by shareholders into the company. Authorized capital is an amount up to which the company can issue shares. This capital is mentioned during the incorporation of the company based on which ROC registration fees and stamp duty is paid. Paid-up capital is an actual investment that goes from shareholders into a company bank account, against which a share certificate is issued by the company.
14. Where is the share capital deposited at the time of Incorporation?
After the company is registered, it needs to open a company bank account, and then anytime within two months of incorporation, capital can be deposited into the company bank account.
15. What are MOA and AOA?
Memorandum of Association (MOA) is a document that contains all the fundamental data which are required for the company incorporation. Articles of Association (AOA) is a document containing all the rules and regulations that govern the company.
16. In what circumstances are physical copies of MOA and AOA required to be signed and attached?
Physical copies are needed to be signed and attached in case non- individual first subscribers are based out of India, or individual foreign subscribers do not hold a business visa. It is to be noted that if physical MOA and AOA are filed, then there is no need to attach eMOA and eAOA.