Private Limited Company
Private Limited Company
|Act||Companies Act, 2013|
|Number of members||2 – 200|
|Separate Legal Entity||Yes|
Register a Pvt Ltd Company
Company is a popular option to start a business in India by startups and businesses with higher growth aspirations. Pvt Ltd company is incorporated under the Companies Act of 2013 and governed by the Ministry of Corporate Affairs (MCA). It is a registered corporate structure, that provides a business a separate legal identity from its owners. Hence, providing key advantages like the ability to contract in its own name, and safeguard personal assets of the owners from business liabilities.
Private Limited Company vs. LLP
Pvt Ltd Company and LLP both are limited liability structures. However, companies offer certain key advantages, especially for startups. Ownership of the company is defined by share capital, which is easy to transfer compared to ownership transfer in LLP. Also, it clearly differentiates management and ownership. Hence, it is preferred by VCs, angel investors, and banks for providing debt or equity funding.
However, one should also consider higher compliance and mandatory audit requirement, making it an expensive structure to maintain.
Registration of Company is Simple with TaxClue
Registration of the company can be completed within 7-10 business days.
TaxClue employs qualified company secretaries and chartered accountants, who ensure the highest customer satisfaction and timely delivery of service.
The entire process is managed online, with regular communication and assistance available throughout. We have clients in all major cities of India including Mumbai, Delhi, Chandigarh, Bangalore, Pune, Ahmedabad, Hyderabad, Chennai, Kanpur, Lucknow, and more. And, Our services have equally relevant reach within smaller cities and towns in the country.
*Stamp duty on Share Capital for the state of Punjab, Kerala, Madhya Pradesh, and Karnataka is not included in the plan given above, it will be paid separately.
Shop Act Registration
DIN and DSC
Why Private Limited?
Protect from personal liability, other risks and losses.
Attracts more customers
Procures bank credits and good investment from reliable investors with ease.
Advantages of Private Limited Company Registration
Easy Fund Raising
Pvt. Ltd. Company registration process is stringent enough to make this structure credible among others which makes fundraising or borrowing from external sources easier. The organization itself provides a number of ways to raise funds in the form of private equity, ESOP, and more.
Separate Legal Existence
Once the Company registration in India is done, a legal entity is born in eyes of law. This separates itself from its owners and managers. The company can operate on its own name simply by opening a bank account to own assets and enter into contract with parties. This also provides right to sue third parties in case of any defaults.
Owners’ Limited Liability
The company’s obligation or debts of does not create a charge over the owner’s personal assets. Their liability stays limited only to the capital subscribed and unpaid by them.
Management and Ownership Separation
The separate ownership and management help both – the company and the management to focus on their potential works. The shareholders assign responsibility to operate and run the company without losing control in the form of voting.
A company has ‘perpetual succession’, that is continued or uninterrupted existence until it is legally dissolved. A company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership. Perpetual succession is one of the most important characteristics of a company.
Transferability of Shares
Shares of a company limited by shares are transferable by a shareholder t any other person. The transfer is easy as compared to the transfer of interest in business run as a proprietary concern or a partnership. Filing and signing a share transfer form and handing over the buyer of the shares along with a share certificate can easily transfer shares.
A company being a juristic person, can acquire, own, enjoy and alienate, property in its own name. No shareholder can make any claim upon the property of the company so long as the company is a going concern. The shareholders are not the owners of the company’s property. The company itself is the true owner.
Capacity to Sue and be Sued
To sue means to institute legal proceedings against or to bring a suit in a court of law. Just as one person can bring a legal action in his/her own name against another in that person’s name, a company being an independent legal entity can sue and also be sued in its own name.
Documents required to register a Private Limited Company
PAN Card of shareholders and Directors. Foreign nationals must provide a valid passport.
Aadhar card and Voter ID/ Passport/ Driving License of Shareholders and Directors.
Director’s Address Proof
Latest Telephone Bill /Electricity Bill/ Bank Account Statement of Shareholders and Directors.
Latest Passport size photograph of Shareholders and Directors.
Business Address Proof
Latest Electricity Bill/ Telephone Bill of the registered office address
NOC from owner
No Objection Certificate to be obtained from the owner(s) of registered office
Rent Agreement of the registered office should be provided if any
In case of NRI or Foreign National, documents of director (s) must be notarized or apostilled
Formulation of Company Name
Mainly it builds the company brand and preferably be a coined word
The second part of the name should suggest the business activity of the company
Name of the company must end with “Private Limited” as a suffix
Register a Company in 3 Easy Steps
1. Fill the Questionnaire
- Make a package that best fits your requirements
- Make payment through secured payment gateways
- Fill in our questionnaire that takes less than 10 minutes
- Provide basic details & documents required for registration
2. Expert Advice and Help
- Assigned Relationship Manager
- Procurement of Digital Signatures (DSC)
- Application for Company Name Registration
- Documents drafting including MOA and AOA
- Certificate of Incorporation
- Application for PAN and TAN
3. Your Company is Registered
- All it takes is 7 – 10 working days
Process to Register a Company in India
- Review of documents and information provided
- Application for Digital Signature Certificate
Day 2 - 3
- Checking Name availability
- Name reservation application under SPICe+
- Drafting of MoA, AoA & other required documents
Day 4 - 5
- Filing company registration application
- Application for ESIC and EPF of company
- Application for PAN and TAN of company
Day 6 - 10
- Government Processing Time
Compare different business structures to choose the right entity type
|Private Limited Company||LLP Registration||One Person Company Registration||Sole Proprietorship Firm Registration||Partnership Firm Registration||Section 8 Company||Public Limited Company Registration||Nidhi Company Registration|
|Act||Companies Act, 2013||Limited Liability Partnership Act, 2008||Companies Act, 2013||No specified Act||Indian Partnership Act, 1932||No specified Act||Companies Act, 2013||Companies Act, 2013|
|Number of members||2 – 200||2 – Unlimited||Only 1||Only 1||2 – 50||Only 1||Unlimited||Unlimited|
|Separate Legal Entity||Yes||Yes||Yes||No||No||No||Yes||Yes|
|Statutory Audit||Mandatory||Dependent||Mandatory||Not mandatory||Not mandatory||Not mandatory||Mandatory||Mandatory|
|Foreign Participation||Allowed||Allowed||Not Allowed||Not Allowed||Not Allowed||Not Allowed||Allowed||Allowed|
Explore Private Limited Company Registration
What are the minimum requirements to register a Private Limited Company?
For Private Company registration in India, following requirements must be fulfilled:
1. Minimum 2 directors shall be appointed, out of which one must be a resident of India.
2. Minimum 2 shareholders are required for this registration. Here, an individual may become shareholder and director at the same time.
3. A place of business in India must be provided as a registered office address.
What is the minimum Capital Requirement?
During the registration, a minimum of INR 1 Lakh should be provided as an authorized capital. A minimum paid-up capital requirement is eliminated as a part of Government’s initiative to simplify the business registration in India. However, each shareholder must subscribe at least 1 share for the registration to introduce the sufficient amount for running the business.
How to reserve the name of a company?
The name of a company should be formulated as mentioned above. The applicants can provide the maximum of 2 names with their preference order under RUN form. The applicant should comply with the provisions of the Act or regulations. The registrar may ask to re-submit the application with a different name if names do not fall under the criteria of uniqueness, relevancy or do not fulfill other requirements.
Who can become a Director of a Private Limited Company?
Any natural person above the age of 18 years can become the director in the company after procuring Director Identification Number (DIN). And since there are no specific criteria provided in terms of citizenship or residency, a foreign national can also become a director. The application of DIN Allotment is now merged with the application for the formation of a company subject to a limit of maximum 3 DIN.
What is the Director Identification Number (DIN)?
Director Identification Number is a unique number assigned by the Ministry of Corporate Affairs to Individuals on whose name the application is made, allowing an individual to be a Director in any Company or Designated Partner in an LLP.
What is a Digital Signature Certificate? Who shall procure it?
Digital Signature Certificate is provided in the form of a token issued by Certified Authorities. Any form filed for online company registration in India shall be submitted after affixing the DSC of an Applicant. Also, the directors will require DSC for DIN application and the subscribers to MOA shall possess DSC for submitting e-forms for incorporation.
What is Authorized Capital and Paid-up Capital?
Authorised capital shows the maximum amount of capital that a company can raise by way of issue of shares at present or in the future. Whereas, the Paid-up Capital refers to the actual amount raised by a company i.e.; amount paid by the shareholders on the issuance of shares. One can register a company in India by any amount of paid-up capital which can be less or equal to the authorized capital but not exceeding the authorized capital.
Can a Private Company carry multiple businesses?
Yes, a Private Company can carry multiple businesses if it is mentioned in the company’s MoA and approved by a registrar. The company can mention more than one business operating within the same field or of the same nature. Activities which are unrelated, such as fashion designing and event management or construction, those cannot be registered under the same company
Can I register the company at the residential place?
Yes, it is possible to register a Private Company at a commercial or residential place by providing the sufficient proof. A registered office is a place where the business receives communication, if any, from the MCA or any concerned authorities. This address is displayed at the portal of Ministry as well.
Can NRIs / Foreigners hold shares in Private Limited Company?
Yes, NRIs or foreigners can hold shares subject to FDI guidelines. However, a foreign participation above 50% will place the company under the category of Foreign Company.
Does anyone has to be physically present for online company registration in India?
No, none of the promoters are required to be present when opted to register a company online. All the forms are filed on the web portal and are digitally signed. Also, the required documents can be sent through e-mail or uploaded on our portal for filing.
What are the statutory requirements to be fulfilled once Private Company is registered?
Once, the company is registered, it should follow below-mentioned requirements on priority:
- The opening of the company’s current account within 30 days after receiving the PAN card.
- Appointment of a Statutory Auditor
- Depositing paid-up capital as mentioned while registration
- Issue and allotment of shares
What are the Annual Compliance requirements to be fulfilled by a Private Company?
During every financial year, the company must hold one Annual General Meeting (AGM) and at least 4 board meetings (one in each quarter). Further, the accounts and financial statements must be audited by an independent auditor. Subsequently, it shall file form AOC – 4 and MGT – 7 as part of Annual Compliance within given time.
What are the applicable tax rates for a domestic company ?
|Business Structure||Tax Rate||Effective Tax rate|
|Domestic Company:||(Base Rate)||(Base rate + surcharge + CESS)|
|Not availing any exemptions or incentives||22%||25.17%|
|Manufacturing companies incorporated after 01st October,2019 and not availing any incentives or exemptions||15%||17.16%|
|Availing any exemptions or incentives- turnover up to 400/- crore during FY 2017-18||25%||25%+ surcharge +4% CESS|
(*Surcharge varies as per the income tax slab)
|In any other case||30%||30%+ surcharge +4% CESS|
(*Surcharge varies as per the income tax slab)
What is the role of Accountants and Auditors in Private Limited Company?
Daily transactions of the business are recorded in the Books of Accounts of the Company by the Accountant/s. The Accounts hence recorded are verified by an Independent Auditor to make sure that no statutory compliance are missed and provide an Audit Report for the same. (Note: TaxClue.co.in shall only take the accountability of the Accounting Service provided by them but however shall help in appointment of Independent Auditor for your business.)