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Private Limited Company Registration
- What is Private Limited Company Registration in India?
- Benefits of Pvt Ltd Company Registration
- How to Register a Company?
- Company Registrations in India
- Characteristics of a Private Limited Company
- Private Limited Company Registration Compliances
- Requirements for Registering a Company
- Documents Required for Company Registration
- Private Limited Company Registration Fees
- Certificate of Incorporation for a Private Limited Company
- Why Choose Vregister Startups for Private Limited Company Registration?
- Importance of Company Registration Certificate
- The Glossary
What is Private Limited Company Registration in India?
A private limited company in India is a business entity offering limited liability to its owners, suitable for a small number of shareholders and allowing up to 200 members. It provides flexibility in shares and shareholdings, making it one of the most recommended methods for starting a business 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.
Shield from Personal Liability:
Company registration provides a shield against personal liability, protecting you from potential risks and losses associated with the business.
Increased Consumer Trust:
Registering your company enhances its credibility, leading to increased trust from consumers and potential clients.
Ease in Procuring Bank Credits:
A registered company can easily secure bank credits and attract substantial investments from reliable investors, providing financial stability and growth opportunities.
Asset Protection:
Private limited company registration offers liability protection, safeguarding your company’s assets from business risks.
Greater Capital Contribution:
Registering your company facilitates greater capital contribution, ensuring greater financial stability and business continuity.
Expansion Potential:
With a registered company, you have an increased potential to grow and expand, tapping into larger markets and scaling your 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
Step 1: Collect Initial Documents
Gather all necessary documents and verify them to initiate the company incorporation process.
Step 2: Obtain DSC and Name Approval
Apply for a Digital Signature Certificate (DSC) and secure approval for your company name from the Ministry of Corporate Affairs (MCA).
Step 3: Collect Additional Documents
Acquire and verify the second set of required documents for company registration.
Step 4: Draft MOA and AOA
Draft the Memorandum of Association (MOA) and Articles of Association (AOA) for your company.
Step 5: Upload Final Forms
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.
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.
By adhering to this checklist, you can ensure that your private limited company registration process proceeds smoothly and meets all the necessary legal requirements.
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.
Importance of Choosing the Right Business Structure
Selecting the appropriate business structure holds significant importance for the following reasons:
1.Legal Compliance:
Different business structures entail varying legal obligations. Opting for the right structure ensures adherence to relevant laws, regulations, and taxation norms applicable in India.
2.Liability Protection:
The correct structure can shield personal assets from business liabilities. For instance, establishing a limited liability partnership or a private limited company provides owners with limited liability protection, safeguarding personal assets from business debts.
3. Tax Implications:
Each business structure carries its own tax implications. Choosing the right structure can help mitigate tax liabilities and leverage available tax benefits and incentives, thereby enhancing profitability.
4. Funding Opportunities:
The choice of business structure can influence the ease of raising capital. For instance, a private limited company can issue shares, making it more appealing to potential investors and lenders.
5. Operational Flexibility:
Different structures offer varying levels of operational flexibility. Selecting the appropriate structure enables business owners to define roles, responsibilities, and decision-making processes according to their requirements.
6. Long-Term Goals:
The chosen business structure should align with long-term objectives. It should facilitate growth, expansion, and potential exit strategies such as mergers, acquisitions, or going public.
Company Name and Capital Selection
Choosing a suitable company name and determining its capital are critical steps in establishing a business. Here’s a brief overview:
Selecting a company name is a creative process influenced by various factors such as the industry in which the business operates, its target audience, and personal preferences. The name should be unique, memorable, and reflective of the brand identity. It’s essential to ensure that the chosen name is available for registration and does not infringe on existing trademarks or copyrights.
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 factors such as the nature of the business, its scale, and growth projections. Capital can include both tangible assets (such as machinery, equipment, and inventory) and intangible assets (such as intellectual property and goodwill). It’s essential to carefully assess the financial requirements of the business and determine an appropriate capital structure to support its objectives effectively.
Private Limited Company Registration Compliances
After completing the process of company registration in India, it is essential to adhere to various compliance regulations to avoid potential fines and legal repercussions. Here are some key post-registration requirements:
1.Auditor Appointment:
Within 30 days of company incorporation, every Indian company must appoint a practicing, certified, and registered Chartered Accountant (CA) as its auditor.
2.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).
3.Commencement of Business:
Shareholders must deposit the subscription amount specified in the Memorandum of Association (MOA) within 180 days of incorporation. Additionally, 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.
4.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 |
5. 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:
1.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. Directors must adhere to the following 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.
2. 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.
3.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.
4.Obtaining Additional Documents:
To authenticate electronically submitted documents, every business must obtain a Digital Signature Certificate (DSC). Additionally, the company requires credentials from professionals such as company secretaries, chartered accountants, and cost accountants who are engaged for various operations.
Comparative List of Different Types of Business Structures in India
This table provides a comparative overview of different business structures in India, highlighting their suitability, tax advantages, and legal compliance requirements.
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 factors such as authorized capital, state-specific requirements, and other associated expenses.
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 breakdown of the fees involved, and assist you in fulfilling all the necessary requirements efficiently.
Certificate of Incorporation for a Private Limited Company
The Certificate of Incorporation is a vital document issued by the Registrar of Companies (RoC) upon the successful registration of a private limited company in India. It confirms the formal establishment of the company as a distinct legal entity.
This certificate typically contains the following details:
Company Name:
The official name under which the private limited company is registered.
Company Identification Number (CIN):
A unique identification number assigned by the RoC to identify the company.
Date of Incorporation:
The specific date on which the company was officially registered and legally recognized.
Registered Office Address:
The official address of the registered office of the company, where all legal communications are directed.
Authorized Capital:
The maximum amount of share capital that the company is authorized to issue as per its Memorandum of Association.
Directors’ Details:
Names and addresses of the directors appointed during the incorporation process.
The Certificate of Incorporation serves as concrete evidence of the company’s legal existence and is essential for conducting various business activities. It is often required for tasks such as opening bank accounts, entering contracts, and obtaining licenses and permits.
Why Choose Vregister Startups for Private Limited Company Registration?
- Convenient Process:
With Vregister Startups, you can complete the entire private limited company registration process, providing you with the flexibility to register your entity from anywhere, anytime.
- Quick Turnaround:
Our expert team ensures a swift registration process, typically completing company incorporation within 14 days. This allows you to expedite the commencement of your business operations without unnecessary delays.
- Comprehensive Package:
Our company registration package includes all essential components required for registration, such as DIN and 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.
- Incorporation Certificate and PAN/TAN:
Upon successful registration, you will receive the incorporation certificate, as well as company PAN and TAN numbers. These documents are crucial for legal compliance and conducting business transactions.
- Zero Balance Current Account:
As part of our package, we offer a zero balance current account to manage your company’s finances conveniently. This account, powered by DBS bank, provides flexibility and ease of use for your financial transactions.
By choosing Vregister Startups for private limited company registration, you can benefit from a hassle-free process, expert guidance, and comprehensive support to kickstart your business journey effectively.
Importance of Company Registration Certificate
A Company Registration Certificate holds significant importance for several reasons:
- Legal Validation of Identity: This 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), granting it 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, as outlined in Section 7(7) of the Companies Act of 2013, is crucial.
The Tribunal has the authority to take the following actions:
a) Management Regulation Order: The Tribunal may issue directives to regulate the company’s management, potentially necessitating amendments to the Memorandum of Association (MOA).
b) Relief from Members’ Obligations: The company might be instructed to relieve all members of their duties.
c) Registration Cancellation: The company’s name could be struck off from the Registrar of Companies (RoC), resulting in the revocation of the registration certificate.
d) Dissolution Order: In severe instances, the Tribunal may order the dissolution of the company.
Rights and Advantages
Having a Company Registration Certificate provides numerous rights and benefits according to your company’s legal framework. These encompass tax incentives, perpetual existence, and additional perks.
Additional Importance of the Certificate
The Company Registration Certificate holds significance for various reasons:
- Business Banking: It facilitates the opening of a separate business bank account for financial operations.
- Share Allocation: The certificate authorizes the company to allocate and distribute shares among investors or shareholders.
- Business Financing: Lenders often require this certificate as essential documentation when applying for business loans.
- Business Transfer: When transferring ownership of the company to a third party, the certificate ensures a lawful and seamless transition of ownership.
Compliance and its Benefits
Ensure compliance and unlock benefits by obtaining your Company Registration Certificate. With Vregister Startups, streamline registration and gain access to financial services, paving the path for diverse business opportunities. Count on our expertise to guide you through 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.
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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.
