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Private Limited Company Registration
The private limited company structure is a favored option for business incorporation in India due to its numerous advantages. This corporate form offers shareholders and directors the benefits of limited liability and a separate legal entity. These factors, coupled with the prestige and credibility it lends to a business, have made it the most prevalent form of company registration in the country, accounting for over 90% of registered companies. Understanding the process, associated fees, and necessary requirements for establishing a private limited company is crucial for aspiring entrepreneurs.
Table of Content
Private Limited Company Registration in India
Establishing a private limited company offers shareholders limited liability while imposing specific ownership restrictions. Unlike an LLP, where partners manage the business, a private limited company registration allows for distinct roles of directors and shareholders.
As your trusted legal advisor, Vregister Startups offers a cost-effective service for registering your company in India. We manage all legal procedures and ensure compliance with regulations set forth by the Ministry of Corporate Affairs (MCA). Upon completing the private limited company registration process, we provide you with an Incorporation Certificate (CoI), PAN, and TAN documents. With these essential documents, you can easily open a current bank account and begin your business operations smoothly.
Benefits of Pvt Ltd Company Registration
Registering a private limited company offers numerous advantages that can significantly enhance your business’s credibility and foster growth. By registering your company, you can leverage several benefits that contribute to your business’s success and expansion:
- Provides protection against personal liability.
- Shields you from potential risks and losses associated with the business.
- Enhances your company’s credibility.
- Leads to increased trust from consumers and potential clients.
- Makes it easier to secure bank credits.
- Attracts substantial investments from reliable investors.
- Provides financial stability and growth opportunities.
- Offers liability protection.
- Safeguards your company’s assets from business risks.
- Facilitates greater capital contribution.
- Ensures financial stability and business continuity.
- Increases potential to grow and expand.
- Allows tapping into larger markets and scaling business operations effectively.
By opting for private limited company registration, you set a solid foundation for your business, ensuring legal protection, financial benefits, and growth opportunities.
How to Register a Company?
Registering a company in India has become incredibly convenient and accessible. At Vregister Startups, we have simplified the process to ensure a seamless experience, whether you want to register a private limited company or any other business structure. You can gain comprehensive insights into the registration procedure with a few essential steps. The business registration system has made the entire process user-friendly and streamlined, eliminating any hassles.
Steps for Company Registration Process in India
Gather all necessary documents and verify them to initiate the company incorporation process.
Apply for a Digital Signature Certificate (DSC) and secure approval for your company name from the Ministry of Corporate Affairs (MCA).
Acquire and verify the second set of required documents for company registration.
Draft the Memorandum of Association (MOA) and Articles of Association (AOA) for your company.
Submit the completed documents and forms for the final stage of company incorporation.
Company Registrations in India
| State | September 2023 | October2023 | November 2023 | December 2023 | January 2024 | February 2024 |
|---|---|---|---|---|---|---|
|
Maharastra |
20000 |
25000 |
25000 |
28000 |
30000 |
32000 |
|
Delhi |
16000 |
18000 |
20000 |
22000 |
24000 |
26000 |
|
Karnataka |
14000 |
16000 |
18000 |
20000 |
22000 |
24000 |
|
Tamil Nadu |
14000 |
16000 |
18000 |
20000 |
22000 |
24000 |
|
Gujarat |
12000 |
14000 |
16000 |
18000 |
20000 |
22000 |
|
Andra Pradesh |
11000 |
13000 |
15000 |
17000 |
19000 |
21000 |
|
kerala |
100000 |
12000 |
14000 |
16000 |
18000 |
21000 |
Please note that these figures represent the number of company registrations completed through the Ministry of Corporate Affairs (MCA) portal. The actual number of company registrations may be higher, as some registrations might have been conducted through other channels.
Characteristics of a Private Limited Company
Members
Under the applicable Act, a private limited company must have a minimum of two members, with a maximum limit of 200 shareholders.
Number of Directors
According to the Act, a private limited company is required to have at least two directors, with the maximum number capped at 15.
Limited Liability
In a private limited company, the liability of its members or shareholders is limited. This means that in case of company losses, shareholders are not personally liable to sell their personal assets for repayment. They are only responsible for the amount of shares they have subscribed to or the guaranteed amount agreed upon.
Perpetual Succession
Perpetual succession ensures that a private limited company continues to exist legally regardless of insolvency, bankruptcy, or the death of any of its members. The company’s existence is continuous and uninterrupted.
Authorized and Paid-Up Share Capital
A private limited company must have an authorized share capital of at least ₹1 lakh. The amendment to the Companies Act has removed the requirement for a minimum paid-up share capital.
Name
The name of a private limited company should include the words ‘private limited’ at the end. For instance, if the company name is ABC, it should be officially written as ‘ABC Pvt. Ltd’ in all communications and registration forms.
Prospectus
A prospectus provides a detailed statement about the company’s status and affairs. However, a private limited company cannot issue a prospectus since it is not permitted to invite the public to subscribe to its shares.
Index of Members
A private limited company is not required to maintain an index of its members as per the Act. In contrast, a public company must maintain such an index.
By understanding these characteristics, you can better grasp the structure and regulatory requirements of private limited companies, ensuring compliance and optimized operations.
Checklist for Private Limited Company Registration in India:
Two Directors:
As per the Companies Act, 2013, a private limited company must have at least two directors, with a maximum of fifteen. At least one of the directors must be a resident of India.
Unique Name:
Ensure that the name chosen for your private limited company is unique and does not match with any existing companies or trademarks in India.
Minimum Capital Contribution:
There is no minimum capital requirement for a Pvt Ltd company. However, it should have an authorized capital of at least ₹1 lakh.
Registered Office:
The registered office of a private limited company can be any location, including a rented home, provided that a No Objection Certificate (NOC) is obtained from the landlord. It does not necessarily have to be a commercial space.
Types of Private Limited Company
1.Company Limited by Shares:
In this type of private limited company, the liability of members is limited to the nominal share amount stated in the Memorandum of Association. Shareholders are not liable for more than the capital invested in the company.
2.Company Limited by Guarantee:
In a private limited company limited by guarantee, the liability of members is limited to the amount of guarantee specified in the Memorandum of Association. Members are not liable for an amount exceeding their guarantee stated in the Memorandum. The guarantee provided by members is invoked only in the event of the company’s winding up and not during normal operations.
3.Unlimited Companies:
Unlimited companies have no limitations on the liability of their members. Each member is personally liable for the company’s debts and liabilities to the full extent. Despite the lack of limited liability protection, an unlimited company is recognised as a separate legal entity, and its members cannot be individually sued.
Company Name and Capital Selection
Selecting a Company Name:
Selecting a company name is a creative process influenced by various factors, including:
- Industry: The name should reflect the nature of the business and the industry in which it operates.
- Target Audience: Consider the preferences and expectations of your target market.
- Brand Identity: The name should be unique, memorable, and align with the brand’s identity.
Key Considerations:
- Ensure the name is available for registration.
- Verify that the name does not infringe on existing trademarks or copyrights.
- Check for domain name availability if planning to establish an online presence.
Determining the Company’s Capital:
The capital of a company refers to the financial resources and investments required to initiate and sustain its operations. The amount of capital needed can vary significantly depending on several factors:
- Nature of the Business: Different types of businesses have varying capital requirements.
- Scale of Operations: The size and scale of the business will influence the amount of capital needed.
- Growth Projections: Future growth plans can affect the initial capital requirements.
Types of Capital:
- Tangible Assets: Includes machinery, equipment, inventory, etc.
- Intangible Assets: Includes intellectual property, goodwill, etc.
Key Steps:
- Assess the financial requirements of the business.
- Determine an appropriate capital structure to support the business objectives effectively.
Post-Registration Compliance Requirements for Companies in India
- Auditor Appointment:
- Within 30 days of company incorporation, every Indian company must appoint a practicing, certified, and registered Chartered Accountant (CA) as its auditor.
- Director DIN KYC:
- Individuals possessing a Director Identification Number (DIN) must undergo a DIN KYC process annually. This verification process helps confirm the accuracy of the phone number and email address on file with the Ministry of Corporate Affairs (MCA).
- Commencement of Business:
- Shareholders must deposit the subscription amount specified in the Memorandum of Association (MOA) within 180 days of incorporation.
- The company must open a bank current account.
- To receive a business incorporation certificate, shareholders of a company with a paid-up capital of ₹1 lakh must deposit ₹1 lakh into the company’s bank account.
- A copy of the bank statement should also be filed with the MCA.
- MCA Annual Filings:
- Every financial year, the MCA requires a copy of the financial statements from each registered company in India.
- Companies incorporated between January and March may include their first MCA annual return in the filing for the following fiscal year.
- The MCA annual return comprises Forms MGT-7 and AOC-4, both of which must be digitally signed by the directors and a practicing professional.
| Company Type | Ideal For | TaxAdvantages | Legai Compliances |
|---|---|---|---|
|
Limited Liability |
Enterprises focusing |
Advantageous depreciation |
Company tax returns; |
|
One Person |
2000Sole Proprietors Seeking |
Tax holiday for
first 3 years
under startup
India; Higher
depreciation |
Business recoveries;
Limited ROC compliance |
|
Private Limited
Company |
Companies with |
Tax holiday for |
Business tax returns;
Roc returns;
Mandatory audit |
|
Public limited
company |
Companies with
subtantial turnover |
Tax exemptions |
Business tax |
Income Tax Filing:
- Businesses must file an income tax return using Form ITR-6 every financial year.
- Regardless of the incorporation date, the company’s income tax return should be filed before the deadline.
- Digital signatures of the directors are required for the income tax return filing.
Requirements for Registering a Company
Before initiating the process of registering a company in India, certain specific conditions must be met. Here are the key requirements:
Directors and Members:
- According to the Companies Act of 2013, a legal Private Limited Company in India must have at least two directors and a maximum of 200 members.
- Director Criteria:
- Each director must possess a Director Identification Number (DIN) issued by the Ministry of Corporate Affairs (MCA).
- At least one director must be a resident of India, meaning they must have spent at least 182 days in the country in the previous calendar year.
Business Name:
- When selecting a name for a private limited company, it must meet two essential criteria:
- Reflect the principal activity of the business.
- Include the term “Private Limited Company” at the end.
- When selecting a name for a private limited company, it must meet two essential criteria:
Registered Office Address:
- After completing the company registration process, the company must provide the permanent address of its registered office to the company registrar.
- This address serves as the primary location for business operations and document storage.
Obtaining Additional Documents:
- To authenticate electronically submitted documents, every business must obtain a Digital Signature Certificate (DSC).
- The company also requires credentials from professionals such as company secretaries, chartered accountants, and cost accountants who are engaged for various operations.
Documents Required for Company Registration
The Ministry of Corporate Affairs (MCA) mandates specific identity and address proofs for private limited company registration in India. Here’s a checklist of the necessary documents for registering a company:
Identity and Address Proof:
- Scanned copy of PAN card or passport (for foreign nationals & NRIs)
- Scanned copy of voter ID/passport/driving license
- Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
- Scanned passport-sized photograph with specimen signature (blank document with signature for directors only)
- Registered Office Proof:
- Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
- Scanned copy of notarised rental agreement in English
- Scanned copy of no-objection certificate from the property owner
- Scanned copy of sale deed/property deed in English (for owned property)
Note:
Your registered office can be a residential space; it is not mandatory to be a commercial premise.
Private Limited Company Registration Fees
At Vregister Startups, we provide comprehensive services for registering a private limited company in India. The fees for registering a private limited company can vary depending on several factors, including:
- Authorized Capital: The initial amount of capital that the company is authorized to raise.
- State-Specific Requirements: Different states may have varying regulations and associated costs.
- Other Associated Expenses: Additional costs that may arise during the registration process.
For an accurate assessment of the registration fees applicable to your specific situation and state, we recommend consulting with our experts. They will:
- Guide you through the registration process.
- Provide a detailed breakdown of the fees involved.
- Assist you in fulfilling all the necessary requirements efficiently.
Why Choose Vregister Startups for Private Limited Company Registration?
Convenient Process:
- With Vregister Startups, you can complete the entire private limited company registration process from anywhere, anytime, providing you with flexibility and convenience.
Quick Turnaround:
- Our expert team ensures a swift registration process, typically completing company incorporation within 14 days. This rapid turnaround helps expedite the commencement of your business operations without unnecessary delays.
Comprehensive Package:
- Our registration package includes all essential components required for registration, such as:
- Director Identification Numbers (DIN) and Digital Signature Certificates (DSC) for two directors
- Drafting of the Memorandum of Association (MoA) and Articles of Association (AoA)
- Registration fees, stamp duty, and more
- This comprehensive package simplifies the registration process and provides you with everything you need to get started.
- Our registration package includes all essential components required for registration, such as:
Incorporation Certificate and PAN/TAN:
- Upon successful registration, you will receive:
- The incorporation certificate
- Company PAN and TAN numbers
- These documents are crucial for legal compliance and conducting business transactions.
- Upon successful registration, you will receive:
Zero Balance Current Account:
- As part of our package, we offer a zero balance current account, powered by DBS bank. This account helps manage your company’s finances conveniently and provides flexibility for your financial transactions.
By choosing Vregister Startups for your private limited company registration, you benefit from a hassle-free process, expert guidance, and comprehensive support to effectively kickstart your business journey.
Importance of Company Registration Certificate
Legal Validation of Identity:
- The Company Registration Certificate serves as legal proof of the company’s identity and its status as a separate legal entity.
- It contains a unique Corporate Identification Number (CIN) assigned by the Ministry of Corporate Affairs (MCA), distinguishing the company from others.
Authorization for Operations:
- The certificate signifies that the company has completed the registration process with the Registrar of Companies (RoC).
- It grants the company the authority to commence business activities as outlined in its Memorandum of Association (MOA).
Consequences of Providing False Information
Understanding the repercussions of furnishing incorrect details during registration is crucial, as outlined in Section 7(7) of the Companies Act of 2013. The Tribunal has the authority to take the following actions:
Management Regulation Order:
- The Tribunal may issue directives to regulate the company’s management, which might include amendments to the Memorandum of Association (MOA).
Relief from Members’ Obligations:
- The company may be instructed to relieve all members of their duties.
Registration Cancellation:
- The company’s name could be struck off from the Registrar of Companies (RoC), resulting in the revocation of the registration certificate.
Dissolution Order:
- In severe cases, the Tribunal may order the dissolution of the company.
Rights and Advantages of a Company Registration Certificate
Having a Company Registration Certificate provides numerous rights and benefits, including:
Tax Incentives:
- Access to various tax benefits and deductions as per the legal framework for registered companies.
Perpetual Existence:
- The company enjoys perpetual existence, meaning it continues to exist regardless of changes in ownership or management.
Additional Perks:
- Access to various business opportunities and legal protections provided to registered entities.
Additional Importance of the Certificate
The Company Registration Certificate is crucial for several additional reasons:
- Business Banking:
- It facilitates the opening of a separate business bank account, essential for managing financial operations.
- Share Allocation:
- Authorizes the company to allocate and distribute shares among investors or shareholders, enabling investment and ownership distribution.
- Business Financing:
- Lenders often require the registration certificate as essential documentation when applying for business loans.
- Business Transfer:
- Ensures a lawful and seamless transition of ownership when transferring the company to a third party.
Compliance and its Benefits:
Ensure Compliance:
- Obtaining your Company Registration Certificate ensures compliance with legal requirements.
Unlock Benefits:
- Gain access to financial services and diverse business opportunities with a registered company.
Expert Guidance:
- With Vregister Startups, streamline the registration process and maximize the advantages of your certificate.
The Glossary
Amendment
An alteration, addition, or removal of existing provisions within the articles of incorporation of a domestic corporation.
Board of Directors
The governing body of a corporation, elected by shareholders, responsible for selecting officers and overseeing the corporation's operations.
Certificate of Incorporation
A document filed in many states to establish a corporation, also referred to as the articles of incorporation.
DSC
A Digital Signature Certificate, issued by certifying authorities, allowing electronic document signing.
DIN
Director Identification Number, a unique identifier assigned to directors.
Dissolution
The legal process that terminates the existence of a domestic corporation.
Incorporation
The act of forming or organizing a corporation under the laws of a specific jurisdiction.
Limited Liability Company (LLC)
An artificial entity governed by the laws of its formation jurisdiction, offering limited personal liability like corporations and pass-through taxation similar to partnerships.
Limited Personal Liability
The protection provided to corporate shareholders, limited partners, or members of an LLC from the company's debts and claims.
Name Reservation
A process allowing a company to secure exclusive use of a corporate name for a designated period.
Registered Office
The statutory address of a corporation, typically the address of the registered agent as required by some states.
Why Choose V-register?
- Choosing V-register for startups offers numerous advantages. With a simplified registration process, startups can easily navigate the legal requirements of registering their businesses. Expert guidance is provided every step of the way, ensuring clarity and compliance.
- V-register's cost-effective solutions cater to startups' budgets, providing comprehensive services from registration to compliance, including company formation, licensing, and tax registration.
- The reliable support offered addresses any queries promptly, while transparent pricing ensures no hidden fees. With a fast turnaround time, startups can swiftly establish their businesses and focus on growth with confidence in V-register's assistance.
