PRIVATE LIMITED COMPANY REGISTRATION IN INDIA
A Private Limited Company is formed with a minimum of 2 (Two) members and a minimum 2 (Two) Directors.
What is a Private Limited Company?
EDITED BY MEENU
A Private Limited Company is a corporate legal entity that can be started by small number of people. It is formed by a group of members called shareholders and its objective is predefined. For registration of a Private Limited Company under the Companies Act, 2013, atleast 2 members and 2 directors are required. The maximum limit of the member is upto 200 for a private limited company. The private Limited Company has restricted the rights to transfer its shares and it does not issue its shares to the public. It is mandatory for the Company to use the word Private Limited after its name.
The Ministry of Corporate Affairs, popularly known as MCA, is the governing body for registration of Private Limited Company. The new entity gets recognized as a Company only after by getting itself registered by making application to MCA.
Most of the new businesses and startups who have high ambitions and wants to have a rapid growth of their business choose Private Limited Company as appropriate option.
There are various advantages if you opt for a Private Limited Company Registration and they are:-
- As prescribed by the Companies Act, 2013 the registration process of a Private Limited Company is simple as it can be registered with only two or more persons.
- The Liability of the member is limited upto the capital contributed by them. In case of any legal liability arises on the Company, then the member cannot be held liable personally for the same.
- The Company is a separate legal entity which is distinct from that of its members having its own rights & Obligations.
- A company has ‘perpetual succession’ which indicates that it will not be affected by the death of any member and continues to be in existence.
- The shares of a Private Limited Company can be easily transferable between the members or to any other person as directed by the member. The procedure to transfer the share is not very complex.
- As the Company is a Separate legal entity so it can purchase or own or sell any property in its own name. Members cannot claim upon the property of the Company.
IMPORTANT REQUIREMENTS FOR REGISTRATION
- Minimum of 2(two) Directors are required and a maximum of 15 (Fifteen) Directors
- DIN (Director Identification Number) of all Directors.
- DSC (Digital Signature Certificate) of the Directors & Subscribers.
- The name of the Company must be exclusive
- Minimum 2(Two) shareholders and maximum of 200(Two Hundred)
- Minimum share capital not required.
- Main Object of the Company is required in order to identify the area of activity.
- Proof of the registered office of the Company such as Rent agreement, Lease agreement, Utility bill etc.
- Passport Size Photograph of the Directors obtaining DIN.
- Certification of Professionals such as as company secretary, chartered accountant, cost accountant, etc are required at the time of incorporation of the Company.
DOCUMENTS REQUIRED FOR REGISTRATION
For registering any entity as a Private Limited Company, the following documents are required for the same:-
Documents required from Directors and Shareholders:
1. For Identity Proof :
- Copy of a Pan Card. If the Member or the Director is a Foreign National or NRI copy of Passport is required that should be apostilled or notarized.
- Copy of Voter Identity Card or Passport or Driving License
2. For Address Proof:
- Copy of the latest bank statement or telephone bill or mobile bill or electricity bill or gas bill of the individual (should not be older than 2 months).
- Consent to Act as Director in Form DIR-2
- Details of DIN (If DIN is already allotted)
- Email Id and Phone Number
3. Proof of Registered office of the Company
- No-Objection certificate from the Owner of the address permitting to use the space as the registered office of the Company.
- If the address proof is in the name of the Owner, then Electricity Bill or Telephone Bill or Gas Bill or Water Bill (not older than 2 months) must be signed by the of the Owner of Premises
- Tax Paid Receipt.
- Rent Agreement or Lease Agreement
Kindly note that the registered office of the Company can be a commercial space or it can be residential place.
PROCESS OF PRIVATE LIMITED COMPANY REGISTRATION
The Private Limited Company can be registered by following steps:
Application for obtaining Digital Signature Certificate (DSC)
At first all the Members and Directors has to obtain the Digital Signature Certificate to sign the incorporation documents. It can be applied online and offline both.
Application for Name Availability in SPICe+ Web Form
As per the recent notification issued by the Ministry of Corporate affairs, this process is facilitated by Part A of a Web Form known as SPICe+. To be on a safer side one should check the desired name availability online. It is suggested to go for Two names on priority basis while applying for the desired name availability during the company registration process.
Preparation and submission of final incorporation documents
After approval of Company’s name, the next step is to prepare and submit the SPICe+ form along with eMOA, eAOA and AGILE PRO to MCA alongwith the prescribed fees. All these documents should be electronically signed using Digital signature certificate of the Subscribers and Directors. Provided all the steps have been completed as per the due procedure the applicant will get notified once the Certificate of Incorporation gets delivered to his mail account. The applicant will also receive the PAN and TAN along with the Certificate of Incorporation.
The applicant can apply for DIN with the SPICE+ Web Form. No need to file any other form for the same.
- Application of EPFO, ESIC, Profession Tax registration(Maharashtra), Opening of Bank Account for the Company is mandatory.
- Declaration by all Subscribers and first Directors in INC-9 shall be auto-generated in pdf format and will have to submit it only in Electronic form in all cases, except if the limit number of subscriber or directors increases and/or any such subscribers and/or directors has neither DIN nor PAN.
- Allotment of GSTIN, if applied.
POST INCORPORATION PROCESS
There are various procedure to follow once the Company gets registered as the Private Limited Company and they are as follows:
- The Company must get its company name, registered office address and the Corporate Identity Number alongside phone number, email id, fax number (if any), and website (if any), printed on letter head and on all the official documents as required. The name plate along with the address of the Company should be fixed at the gate of the Company office.
- To obtain certificate of Commencement of Business by filing form INC 20A within 180 days from the date of incorporation
- The Board of Directors of the Company must appoint the first auditor within 30 days of Incorporation. In case the Board fails to appoint the auditor, then an EGM shall be called within 90 days to appoint the first auditor.
FREQUENTLY ASKED QUESTIONS (FAQ’s)
As per the Companies Act, 2013, the definition of a Private Limited Company is:
A Company which has a minimum paid-up share capital of any amount as required, and which by its articles,—
(i) has restricted the right to transfer the shares of the Company;
(ii) limits the number of its members to two hundred, except in the case of One Person Company
(iii) the general public cannot subscribe for any securities of the company, as it prohibits any invitation to the public.
Is it mandatory to have DIN?
Yes, it is mandatory to have DIN. The applicant who does not have DIN can apply for the same in SPICe+ Web Forms. Maximum of 3 Directors can obtain DIN with SPICe+ Web Form.
Are the Subscribers and Directors required to have DSC?
Yes, the Subscribers and Directors are required to have DSC. For signing the incorporation Documents the Subscribers and Directors must have DSC.
Is appointing auditor mandatory for Private Limited Companies?
Yes, appointment of a auditor is mandatory in a Private Limited Company.
How long will it take to get Private Limited Company registered?
The new initiative which provides the smoother online submission of required Forms and documents have made it easier to register a Private Limited Company. If all the documents are in order it takes approximately 6 to 7 days to get a Company registered.
Who is eligible to be the Director of the Company? Can a Foreigner or NRI become a Director of a Private limited Company?
As per the Companies Act, 2013, any person can be a director of the Company. This includes a Foreign National also. Although it is required that he or she must fulfil all the required criteria which is prescribed in the Act. The most important criteria is being the allotment of DIN. Moreover, such persons should give it formally a consent in Form DIR-2 in writing to act as the Director of the Private Limited Company.
Within how many days Form INC 20A should be filed?
Form INC 20A should be filed within 180 days from the date of its incorporation. Form INC 20A is filed with the registrar stating that every subscriber to the memorandum has deposited the value of the shares agreed to be taken by them on the date of signing of such declaration.