Private Limited Company Registration
Private Limited Company Registration -Starting your own business is a thrilling journey—but it also involves making crucial decisions, especially when it comes to choosing the right business structure. One of the most favored and reliable options for startups and growing companies in India is the Private Limited Company (Pvt Ltd). It offers a solid foundation, legal recognition, and flexibility to scale.
A Private Limited Company is a privately held entity formed by a group of individuals. In a private limited company, shareholders’ liability is limited to the amount they have invested in shares. However, unlike public companies, its shares are not available for public trading.
This type of company is widely preferred in India and can be registered with a minimum of two members and two directors. The upper limit for members is capped at 200, making it an ideal choice for family-owned or professionally managed small and medium-sized enterprises.
A Private Limited Company is a business entity held privately by a small group of people. It must have at least two directors and two shareholders, and can have up to 200 shareholders. One major advantage is that the liability of members is limited to their shareholding—your personal assets are protected.
Before you start process for a Private Limited Company Registration, here are some essential guidelines to keep in mind:
- Minimum Number of Directors
To incorporate a Private Limited Company, you need at least two directors. The law allows a maximum of fifteen directors. Out of the total, at least one director must be an Indian resident, meaning they have stayed in India for at least 182 days during the previous calendar year. - Unique Business Name
Choosing a distinct and original name is crucial. The proposed company name must not be identical or too similar to the name of any existing company or registered trademark in India. Make sure to check the MCA and trademark databases before finalizing the name. - Capital Requirement
There is no prescribed minimum capital for starting a private limited company. However, the company should have an authorized share capital of at least ₹2, which can be increased later as needed. - Registered Office Address
It is essential for the company to have a registered office address in India. It doesn’t have to be a commercial property—a residential property or rented space is acceptable. If the property is rented, a No Objection Certificate (NOC) from the landlord is required, along with proof of address (like a utility bill).
- No Minimum Capital Requirement
Following the amendments introduced by the Companies Act, 2013, there is no mandatory minimum paid-up capital for registering a private limited company. A company can be incorporated with a minimal authorized share capital, even as low as Rs. 2. - Independent Legal Identity
A private limited company is treated as a distinct legal entity, separate from its shareholders and directors. This distinction allows the company to own property, incur liabilities, and initiate or face legal proceedings under its own name. It also ensures a clear division between ownership and management, making the managerial team accountable for any operational losses. - Limited Liability Protection
The liability of shareholders in a private limited company is restricted to the value of their shareholding. In the event of financial loss or debt, their personal assets remain protected. The liability is restricted to any unpaid amount on their shares, offering a level of financial security. - Ease of Raising Capital
Compared to sole proprietorships or partnerships, private limited companies find it easier to attract investment. Institutional investors, including venture capitalists and angel investors, typically prefer to fund companies with this legal structure due to better transparency and governance practices. - Continuity of Business
The existence of a private limited company is not affected by changes in ownership or the demise of shareholders or directors. This concept of perpetual succession ensures that the company continues its operations uninterrupted until formally dissolved. - Access to Foreign Investment
Private limited companies are eligible for 100% Foreign Direct Investment (FDI), meaning foreign individuals or organizations can invest directly without needing prior government approval. This opens up opportunities for expansion and international growth. - Improved Business Credibility
Details such as incorporation documents and financial statements of a private limited company are publicly accessible through the Ministry of Corporate Affairs (MCA) portal. This transparency builds trust among potential investors, customers, and financial institutions, making the company more credible in the market.
Step 1: Name Reservation
The process begins by submitting an application to the Registrar of Companies (RoC) to reserve a suitable company name. This involves filing the designated form to get name approval.
Step 2: Obtaining Digital Signatures
Once the name is approved, digital signature certificates (DSCs) are acquired for the individuals signing the Memorandum of Association (MoA) and Articles of Association (AoA). These signatures are essential for electronically signing the incorporation documents.
Step 3: Preparation of Incorporation Documents
All the necessary incorporation documents, such as the MoA, AoA, and other required declarations and proofs, are drafted and compiled in this stage.
Step 4: Filing with the Registrar
After preparing the documents, they are submitted along with the relevant forms (like SPICe+) through the MCA portal for processing by the Registrar of Companies.
Step 5: Issuance of Certificate of Incorporation
Once the Registrar verifies the application and supporting documents, the company is officially registered and a Certificate of Incorporation is issued, confirming its legal existence.
- Company Name (4 Names)
- Company Phone No.
- Company Mail ID
- Object (Nature of Business)
- Initial Capital Contribution by All Shareholder (MinimumRs.2 /-)
- Proof for Place of Business-
- Self-attested copy of utility bill of registered office address within 60 days Any One -(Electricity/ Telephone/Mobile/Gas Bill) having similar name and address as that of ownership proof
- Ownerships Proof- Index II or Property Tax bill or Sale deed or rent agreement in the name of company
- No objection letter from owner of the said property.
- Details of Directors/Shareholder
- DPIN (If Already Director in Any LLP or Company)-
- Self-attested copy of ID Proof (Passport/Voter ID/Driving License)- All Directors /Shareholder
- Self-attested copy of Address Proof within 60 days (Electricity/Telephone/Mobile Bill/Bank statement) having similar name
- All Directors / Shareholder Passport size photo
- Email Id All Directors/Shareholder
- Mobile Number of All Directors/Shareholder
- Place of birth of All Directors /Shareholder
- Education Qualification of All Directors /Shareholder
- Occupation of All Directors /Shareholder
- Residential status of All Directors /Shareholder
- Citizenship of All Directors /Shareholder
- DSC if available else we will apply
- Period of stay at present address (Year Months) of All Directors /Shareholder
- Capital Contribution of All Shareholder
- Self-attested copy of PAN of All Directors/Shareholder
Upon successfully incorporating your company, you will receive several essential documents that serve various legal and operational purposes. These include:
- Director Identification Numbers (DINs): Unique identification numbers assigned to up to two directors, enabling them to act officially on behalf of the company.
- Digital Signature Certificates (DSCs): Electronic signatures for two subscribers, facilitating the secure signing of digital documents during company operations.
- Certificate of Incorporation: An official document issued by the Registrar of Companies, confirming the company’s formation and legal existence.
- Share Certificates: Documents that certify ownership of shares within the company, detailing the shareholders and their respective shareholdings.
- Memorandum and Articles of Association (MoA and AoA): Foundational documents outlining the company’s objectives, rules, and internal governance structures.
- Provident Fund (PF) and Employee State Insurance (ESI) Registration Certificates: Registrations that enable the company to provide statutory social security benefits to its employees.
- Permanent Account Number (PAN) Card: A unique identifier issued by the Income Tax Department, essential for tax-related activities and financial transactions.
- Professional Tax Enrollment Certificate (PTEC): Registration that allows the company to pay professional tax on its own behalf and, in certain cases, on behalf of its directors or owners.
- Professional Tax Registration Certificate (PTRC): Registration enabling the company, as an employer, to deduct and remit professional tax from employees’ salaries to the state government. Tax Deduction and Collection Account Number (TAN): A number required for deducting and remitting tax at source on certain payments, as mandated by the Income Tax Act.
- Bank Account Opening Documents: A set of documents, including the Certificate of Incorporation, MoA, AoA, PAN card, and board resolutions, necessary to establish a corporate bank account in the company’s name.
