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Private Limited Company Registration

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  • Overview
  • Rules and Regulations
  • Eligibility
  • Benefits
  • Requirement
  • Documents
  • Process
  • Fees
  • FAQs

What is Private Limited Company Registration in India?

A Private Limited Company is the most popular and effective avenue for top growth aspirants when starting a business in India. It is incorporated under the Companies Act 2013 and has various benefits, as it guarantees limited liability and a separate legal entity protecting personal property. Startups and growing entities mainly prefer this type of entity. So, if you are willing to start a company, your priority is registering it. Once reported, it increases its authenticity and offers various benefits that can provide liability protection to protect the company’s assets, attract more and more funds, and so on.

 

What are the Private Limited Company Registration Rules in India?

A private limited company is a legal entity constituted under the Companies Act of the jurisdiction in which it is formed. This type of corporation is created and held by a small number of shareholders, each with limited liability for its obligations, ensuring that their assets are protected if the company fails. Private limited businesses are also legal entities distinct from their shareholders, allowing them to raise cash by selling shares to investors. As a result, it is a desirable corporate structure for businesses looking to fund their activities.

Individuals must follow the procedures outlined in the Companies Act to incorporate a private limited company, which generally include submitting documents such as the memorandum of organization and articles of association to the Registrar of Companies for approval. Private limited companies can be an effective tool for entrepreneurs starting and growing their enterprises legally. They can safeguard themselves and their assets while gaining access to the capital needed to fund their activities by following the correct procedures for establishment and registration.

Basis of Private Limited Company

  • Registration Requirement :  Companies Act, 2013
  • Number of Members : 2 – 200
  • Number of Director : 2-15
  • Naming of Entity : Unique
  • Capital Requirement : Zero
  • Liability of Entities : Limited
  • Foreign Investment : Eligible
  • Statutory Audit : Mandatory
  • Compliance Level : Annual Compliance
  • Tax Rate : 22%

 

What are the Eligibility of Private Limited Company Registration?

The eligibility criteria for Private Limited Company Registration may differ depending on the country or jurisdiction’s laws and regulations. However, some frequent eligibility conditions are as follows:

  • Minimum number of shareholders: Most jurisdictions demand a minimum of two shareholders for private limited firms. In other countries, however, a single shareholder may be permitted.
  • Minimum number of directors: There should be at least two directors. One must be a citizen of the nation where the firm is registered.
  • Share capital: A minimum share capital requirement may be met during the company registration procedure. However, in some jurisdictions, no minimum capital requirement exists.
  • Shareholder nationality: There may be limits on shareholders’ nationality or residency. Some countries let foreign shareholders, while others require at least one local shareholder.
  • Name availability: The proposed company name should be distinct and not the same or similar to any existing company name.
  • Company purpose: The company’s Memorandum of Association should state a clear legal objective.
  • Registered office: A physical address should be provided as the company’s registered office, where all official correspondence will be sent. Companies must follow on-going reporting and compliance requirements, such as filing yearly returns, financial statements, and tax returns.

 

What are the Benefits of Private Limited Company Registration?

here are top 10 benefits of private limited company registration in India.

  1. Limited Liability: The liability of the shareholders is limited to the extent of their shareholding in the company. It means that their assets are not at risk in case of any financial losses or legal liabilities incurred by the company.
  2. Separate Legal Entity: A private limited company is considered a separate legal entity from its shareholders. It means the company can enter into contracts, own assets, incur debts, and sue or be sued in its name, separate from the shareholders.
  3. Perpetual Existence: A private limited company enjoys perpetual existence, meaning that its existence is not affected by the death or retirement of any of its shareholders. The company continues to exist regardless of the changes in its ownership structure.
  4. Ease of Raising Funds: Private limited companies have more significant fundraising opportunities than sole proprietorships or partnerships firm. They can issue shares, take bank loans, and attract investments from venture capitalists or angel investors, which can help in expanding business operations.
  5. Credibility and Trust: Being a registered and regulated entity, a private limited company instills credibility and trust among customers, suppliers, and other stakeholders. It is often perceived as a more reliable and professional business entity, which can be advantageous for building a strong reputation in the market.
  6. Tax Benefits: Private limited companies may avail of various tax benefits and incentives provided by the government, such as tax deductions on business expenses, exemptions on capital gains, and lower tax rates for small businesses. This can result in significant tax savings for the company and its shareholders.
  7. Ease of Ownership Transfer: Shares in a private limited company can be easily transferred or sold to other individuals or entities, providing flexibility and ease of ownership transfer. It facilitates business succession planning or attracting new investors without disrupting the company’s operations.
  8. Confidentiality and Privacy: Private limited companies offer privacy and confidentiality as the information about the shareholders or directors and their shareholdings is not disclosed publicly. It can be advantageous for maintaining the confidentiality of crucial business operations and strategies.
  9. Greater Management Control: Private limited companies allow for centralized decision-making and greater control over the management and operations of the company. The shareholders can appoint directors and managers who can efficiently handle day-to-day activities and implement business strategies per their vision.
  10. Employee Motivation: Private limited companies often offer employee stock option plans (ESOPs) to attract and retain talented employees. It enables employees to become shareholders of the company, aligning their interests with the overall success and growth of the business.

 

What are the Requirements for a Private Limited Company?

The prerequisites for registering a Private Limited Company may differ depending on the contry and jurisdiction. However, some everyday needs are as follows:

  • Company Name: A unique name for the company that complies with the country’s naming rules and regulations.
  • Directors and Shareholders: There must be at least one director and one stakeholder. The directors must be over 18 and not be barred from acting as directors.
  • Registered Office: A physical address within the country where the firm will be registered that will act as the official address for receiving official correspondence.
  • Share Capital: The amount of share capital invested by each shareholder in the company, representing their ownership position.
  • Incorporation Documents: Various forms and documents, such as a completed application form, identification documents for directors and shareholders, and other applicable supporting documents, may be required for incorporation.
  • Legal Entity Identifier (LEI): In some jurisdictions, an LEI may be required to identify the company for regulatory purposes.
  • Fees and Taxes: The payment of registration fees and taxes vary by jurisdiction.
  • Compliance: Compliance refers to specific standards or regulations a particular country or territory sets.

To ensure that all special requirements for company registration are met, it is critical to confer with the necessary government authorities or obtain professional guidance.

 

What Documents Required for Registration of a Private Limited Company?

To register Private Limited Company in India these are the documents required by Directors and Shareholders

Documents required for Indentity and Address Proof

  • Directors / Shareholders Photograph : Passpost size photograph of shareholder / directors required.
  • Aadhar Card : Copy of Aadhar Card of directors shareholder / required.
  • Driving License / Voter ID : Copy of Driving License / Voted id of Directors / Shareholder required
  • PAN Card : Copy of PAN Card of Directors / Shareholder required
  • Bank Statment : Copy of Bank Statement of Directors / Shareholder required
  • Electricity Bill : Copy of electricity bill of Directors / Shareholder required
  • Passport : Copy of passport Directors / Shareholder required (If you are an NRI)

 

Documents required for Address Proof

  • Electricity Bill : Copy of electricity bill of Directors / Shareholder required (Should not be older then 2 months)
  • Rent Agreement : Copy of rent aggrement required if you are on rent.
  • NOC Certificate : No Objection Certificate (NOC) required by owner of the property.

 

What is the Procedure for Registration of Private Limited Company?

Private limited company registration process By registering their company, start-ups in India can get an advantage over unregistered competitors. While the registration procedure is becoming more involved and contains several compliance criteria, you don’t have to worry because ApkaTax is here to help you with every step. Our experienced staff can give thorough assistance with forming a limited liability corporation.

Step 1: Approval of the RUN Name:

The first stage in company formation is to register your selected name. To reserve a name for your business, you must first file a name approval request to the Ministry of Corporate Affairs (MCA). In your application for name permission, you may provide one or two proposed names and a description of your business aims. You may submit one or two more terms if your first choice is not accepted. The MCA typically approves name requests within five business days. Our team of specialists can assist you in selecting the best name for your business and guiding you through the government registration process.

Step 2: Digital Signature Certificate (DSC) for Directors: 

Traditional signatures are not accepted by the MCA in India. Instead, all MCA filings must include a digital signature authorized by an Indian certification authority. As a result, digital signatures are required for directors before the incorporation of the firm. ApkaTax will get the directors a digital signature certificate (DSC) from a reputable certification agency. Directors must give a copy of their identification documents and complete a video KYC process to receive a digital signature. If a director is a foreign national, their passport and other paperwork for company registration should be apostille by the nearest embassy.

Step 3: Submitting the Application for Company Incorporation: 

After getting the appropriate digital signatures, submit the incorporation application in the SPICe form and any required attachments to the MCA. The company’s Memorandum of Association (MOA) and Articles of Association (AOA) are included in the incorporation application. If the MCA finds the incorporation application complete and acceptable, the firm will be issued an incorporation certificate and a PAN. The MCA typically approves all incorporation applications within five business days.

What is Private Limited Company Registration Assist?

  • End-to-End Assistance : We provide thorough assistance and comprehensive service for getting your Pvt Ltd Company Registration.
  • Expert Legal Guidance : ApkaTax offers comprehensive support for the Pvt Ltd Company Registration application process, including legal assistance based on the specific priorities of our clients.
  • Best in Class Client Support : Our dedicated support team ensures that our clients stay informed about the latest guidelines and updates regarding Pvt Ltd Company Registration requirements and periodic inspections.

 

What is the Private Limited Company Registration Fees?

Are you looking for Private Limited Company Registration Fees then here the details for you. The Pvt Ltd Company Registration cost start from ₹3500 to ₹10000 along with Government Fee ₹2500 and Professional Fee ₹1000.

Steps Fees 
Private Limited Company Registration Fee ₹3500 To ₹10000
Government Fee ₹2500
Professional Fee ₹1000

 

FAQs

To start a new business in India, you must apply to the Ministry of Corporate Affairs (MCA). You can also apply remotely through the MCA portal. A Digital Signature Certificate (DSC) and a Director Identity Number (DIN), among other things, are required for registration.

The cost of incorporation/registration of a private limited company ranges between INR 6,000/- and INR 30,000/-, based on the number of directors, members, authorized share capital, and professional expenses. Professional prices may vary depending on the task's intricacy.

A minimum of two shareholders are required for a private limited company. As a result, a single person cannot own 100% of the shares in a private limited corporation.

The typical annual cost of maintaining a Private Limited Company ranges between ₹10,000 and ₹15,000, depending on your turnover. However, if your company has no turnover, your average maintenance cost would be ₹8000 to ₹10,000/-.

In India, the maximum number of members in a private limited company is 200. The Companies Act of 2013, the Regulation Act of Private Limited Companies, stated that a private company's maximum number of members shall be 200. A One Person firm is a firm that has only one member.

Selling off a Private Limited Company is also a form of voluntary liquidation. Selling corporate shares (the company's majority stake) is possible.

A corporation that suffers a loss must perform a statutory audit. According to the Act and Companies (Accounts) Rules, 2014, every private limited company must have its annual accounts audited each fiscal year.

A person must be at least 21 years old to be qualified to be a director, according to Section 157 of the Companies Act. As a result, this is the first prerequisite. People under 18 can become competent.

While the shareholder owns the company, the directors are the managers. Unless the company's articles of association prevent it, the same person can fill both responsibilities.

2.00 crores ₹. If the annual sales turnover of a One Person Company surpasses, ₹2.00 crores or the paid-up capital of the One Person Company exceeds Rs. Fifty lakhs, the Person Company must be transformed into a Private Limited Company.

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