Private Limited Company registration (PLC registration) is a popular way to start a business in India. It offers benefits like limited liability protection to founders, separate legal existence, better credibility, and ease in raising external funds. Hence, Startups and progressive businesses, with higher risk and growth aspirations, prefer a company structure. It is registered with the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013.
| Company Details | |
| Act | Companies Act, 2013 |
| Registration Requirement | Mandatory |
| Number of members | 2 – 200 |
| Separate Legal Entity | Yes |
| Liability Protection | Limited |
| Statutory Audit | Mandatory |
| Ownership Transferability | Restricted |
| Uninterrupted Existence | Yes |
| Foreign Participation | Allowed |
| Tax Rates | Moderate |
| Statutory Compliances | High |
Tags: privatecompany, business limited, starting, india
Company registration in India can be done online with the help of TaxClue.
The most popular form of a legal entity, favored by millions of Indian entrepreneurs and well-known firms like Flipkart, Paytm, and Zomato, is the private limited company.
Online registration for a private limited company is incredibly cost-effective and takes less than ten days.
TaxClue is one of the best platforms to register your private company registration in Delhi online with affordable prices.
One of India's most frequent types of legal entities is a Private Limited Company (PLC).
The Companies Act of 2013 governs private limited companies, which must have at least two directors and two shareholders, one of whom must be an Indian resident and citizen.
In most sectors in India, 100% foreign direct investment (FDI) is permissible, and there are no restrictions on foreign shareholding in a private limited business.
Therefore, private limited companies are founded in India for most foreign subsidiaries.
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.
One of the advantages of forming a Private Limited Company is that the share may be transferred to another individual without any problems or bother.
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.
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.
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.
Latest Telephone Bill /Electricity Bill/ Bank Account Statement of Shareholders and Directors.
Latest Passport size photograph of Shareholders and Directors.
Latest Electricity Bill/ Telephone Bill of the registered office address
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
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
| 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 |
| Registration Requirement | Mandatory | Mandatory | Mandatory | No | Optional | No | Mandatory | Mandatory |
| 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 |
| Liability Protection | Limited | Limited | Limited | Unlimited | Unlimited | Unlimited | Limited | Limited |
| Statutory Audit | Mandatory | Dependent | Mandatory | Not mandatory | Not mandatory | Not mandatory | Mandatory | Mandatory |
| Ownership Transferability | Restricted | Yes | No | No | No | No | Unrestricted | Unrestricted |
| Uninterrupted Existence | Yes | Yes | Yes | No | No | No | Yes | Yes |
| Foreign Participation | Allowed | Allowed | Not Allowed | Not Allowed | Not Allowed | Not Allowed | Allowed | Allowed |
| Tax Rates | Moderate | High | Moderate | Low | High | Low | Moderate | Moderate |
| Statutory Compliances | High | Moderate | Moderate | Less | Less | Less | High | High |
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?
How to reserve the name of a company?
Who can become a Director of a Private Limited Company?
What is the Director Identification Number (DIN)?
What is a Digital Signature Certificate? Who shall procure it?
What is Authorized Capital and Paid-up Capital?
Can a Private Company carry multiple businesses?
Can I register the company at the residential place?
Can NRIs / Foreigners hold shares in Private Limited Company?
Does anyone has to be physically present for online company registration in India?
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:
What are the Annual Compliance requirements to be fulfilled by a Private Company?
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?
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