Private Limited Company Registration Online In India
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Private Limited Company Registration in India: A Comprehensive Guide
In India, the Private Limited Company structure, governed by the Companies Act of 2013, stands as a favored choice for entrepreneurs seeking to establish businesses. This registration process not only provides a robust framework for business development but also offers directors the advantage of limited liability. To register under the Companies Act of 2013, adherence to guidelines set by the Ministry of Corporate Affairs (MCA) and registration with the Registrar of Companies (ROC) is imperative.
RegisterKaro provides a cost-effective service facilitating the Private Limited Company Registration process, ensuring compliance with legal formalities and MCA regulations. Upon successful registration, entrepreneurs receive a Certificate of Incorporation, PAN, and TAN documents, enabling them to commence business operations seamlessly after establishing a current bank account.
Types of Business Structures in India
Private Limited Company: This structure, the most prevalent in India, is privately held by shareholders, with a maximum limit of 200 shareholders. The liability arrangement is akin to a Limited Partnership, where shareholders’ liability extends only to the number of shares held.
Public Limited Company: This entity, incorporated under the Companies Act, possesses a separate legal existence, with members’ liabilities limited to their shareholdings.
One Person Company (OPC): An OPC is established and managed by a single individual, enjoying features like limited liability and a separate legal identity.
Limited Liability Partnership (LLP): Combining the benefits of limited liability and partnership flexibility, LLPs are liable to the extent of their assets, with partners’ liabilities limited to their agreed contributions.
Sole Proprietorship: Fully owned and controlled by a single individual, company, or LLP, Sole Proprietorships lack a separate legal entity, with the owner having unlimited liability for all debts and losses.
Importance of Choosing the Right Business Structure
Selecting the appropriate business structure is crucial for navigating tax rates, management requirements, fundraising capabilities, and more in India. While partnerships and Sole Proprietorships are easier to establish, they lack liability protection. Each structure entails different compliance levels; for instance, while sole proprietors file only income tax returns, companies must also submit annual returns to ROCs.
Benefits of Private Limited Company Registration
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- Separate Legal Existence: Enjoying autonomy from owners, a Private Limited Company can enter contracts, own assets, and sue third parties in its name, with perpetual existence.
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- Ease in Raising Funds: Compliant structures like Private Limited Companies facilitate easier loan issuance by banks, offering limited liability protection and ownership transferability.
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- Limited Liability: Owners can limit their liabilities to capital contributions, safeguarding personal assets from business losses, unlike in proprietorships and partnerships.
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- Easy Share Transfer: Private Limited Company shares can be transferred smoothly to other individuals without complications.
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- Employee Stock Option Plans (ESOPs): Private Companies can issue ESOPs to employees, subject to shareholder limitations under Section 61 of the Companies Act.
Checklist for Private Limited Company Registration
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- Minimum of 2 directors and shareholders (maximum of 200 shareholders)
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- Digital Signature Certificates (DSC) for designated directors
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- Director Identification Numbers (DIN) for all directors
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- At least 1 Indian resident director
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- Unique company name
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- Authorized capital
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- Memorandum of Association (MoA) and Articles of Association (AoA)
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- Proof of registered office
Documents Required for Private Limited Company Registration
Documents related to designated directors:
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- Aadhar and PAN cards
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- Passport-sized photos
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- Identity and address proofs
Documents related to the company:
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- Proof of registered office
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- Rental agreement, NOC from landlord, or sale deed
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- MoA and AoA
By adhering to these guidelines and requirements, entrepreneurs can navigate the process of registering a Private Limited Company in India efficiently and effectively.
Guide to Registering a Private Limited Company in India
Here’s a comprehensive guide outlining the step-by-step procedure for registering a Private Limited Company in India:
Step 1: Obtain DSC and DIN Private Limited Company Registration is an entirely online process. To begin, secure a Digital Signature Certificate (DSC) to authenticate your online submissions to the MCA portal. Additionally, obtain a Director Identification Number (DIN) to access the application form. Our experts can assist you in obtaining these credentials efficiently.
Step 2: Filing Incorporation Form (SPICe+ Form) This step involves submitting the SPICe+ Form, divided into two parts:
SPICe+ Part-A Form: Select “Private Limited Company” as the company type and provide essential details such as company class, category, sub-category, and main division. Propose two company names and await approval, which typically takes 3-4 days. If names are rejected, you have the opportunity to propose more. Once approved, proceed to SPICe+ Part-B Form.
SPICe+ Part-B Form: Submit details of designated directors and shareholders, company resources, and registered office. This form also allows for PAN & TAN application. Ensure accuracy and conduct a pre-scrutiny check before submission. Additional forms such as SPICe+ MoA, SPICe+ AoA, AGILE Pro, INC-9, and URC-1 may also be required, filled as per provided instructions.
Step 3: Certificate of Incorporation Upon verification of your application and documents, the Ministry of Corporate Affairs (MCA) grants the Certificate of Incorporation. This certificate serves as conclusive proof of the company’s existence, mentioning incorporation details like CIN, PAN, and TAN. DINs are also allotted to directors. The Certificate of Incorporation establishes the legal entity of your business.
Name and Capital of the Company Considerations regarding the company’s name and capital:
Capital: Private Limited Companies have no minimum paid-up capital requirement, whereas Public Limited Companies require a minimum of Rs 5 lakhs. The authorized capital must be at least Rs. 1 lakh, as mentioned in the Memorandum of Association.
Company Name: Propose a suitable name in the SPICe+ 32 application form, ensuring it is unique and compliant with regulations. If rejected, alternative names can be submitted. The format for a Private Limited Company name is “ABC Pvt. Ltd.”
Compliances under Companies Act Ensure compliance with the Companies Act, 2013, covering various aspects such as director appointments, board meetings, annual accounts preparation, and maintenance of statutory registers. Post-incorporation compliances include conducting board meetings, maintaining financial records, issuing share certificates, and fulfilling CSR obligations.
Note: Additional registrations such as GST Registration, Professional Tax Registration, etc., may be required based on turnover and business type. Compliance with the Companies Act is an ongoing process, not a one-time requirement.
Comparative List of Different Business Structures in India
Particulars | Private Limited | OPC | Partnership Firm | LLP | Proprietorship Firm |
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Registration | Mandatory | Mandatory | Optional | Mandatory | Optional |
Applicable Law | Companies Act, 2013 | Companies Act, 2013 | Indian Partnership Act, 1932 | LLP Act, 2008 | No specified Act |
Ownership Transfer | Yes | Yes | Yes | Yes | No |
Liability Protection | Limited | Limited | Unlimited | Limited | Unlimited |
Separate Legal Entity | Yes | Yes | No | Yes | No |
Compliance Requirement | High | High | Low | Moderate | Low |
Perpetual Existence | Yes | Yes | No | Yes | No |
How GoStartup Facilitates the Private Limited Company Registration Process
With GoStartup, establishing your company becomes effortless in just a matter of days. Our Private Limited Company Registration package encompasses:
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- Company Name Approval
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- Acquisition of DSC & DIN for Directors
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- Submission of SPICe+ Form
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- Provision of COI (Certificate of Incorporation) alongside PAN & TAN
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- Facilitation of current account opening for your Company
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- Handling of stamp duty payment for authorized capital up to Rs. 1 lakh, excluding Kerala, MP & Punjab.