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Private Limited Company Incorporation

Get in touch with CertificationsBay, India’s leading compliance service provider, for expert support in expediting your private limited company incorporation process. Our action-oriented approach ensures sustained efforts to assist you throughout the registration process. Contact us now to learn more about how our consultancy services can help you with incorporating your private limited company.

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The cost of establishing a business in the India varies significantly, depending on a range of factors, such as:

  • Type of business
  • Location
  • Specific licensing requirements

Offering all-inclusive business setup services in India, we understand these complexities and offers a comprehensive cost calculator. This tool provides a transparent estimation of all expenses involved in setting up your business in India. With CertificationsBay’s cost calculator, you can strategically plan your investment, making the journey toward business establishment more transparent and manageable.

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What is a Private Limited Company?

Section 2 (68) of the Companies Act 2013 states that a Private Limited Company is a type of company whose Article of Association (AoA) restricts the transfer of shares and limits the number of public subscribers. In essence, a Private Limited Company is a business entity that is privately owned, often by non-governmental organizations, small shareholders, or members of a company.

Advantages of a Private Limited Company

Limited Liability: Limited liability is a significant advantage of Private Limited Companies. This means that in the event of financial distress, members are only liable to pay up to the nominal value of their shareholding, and nothing more. For example, if the company is unable to repay a loan, the members are only responsible for the amount they own towards their shareholding. As a result, members are not required to pay any unpaid amount of the loan beyond their shareholding.

No Minimum Capital Required: When registering a Private Limited Company online, there is no requirement for a minimum capital amount. This means that you can start the company with as little as Rs. 1 lakh as the total authorized share capital.

Separate Legal Entity: The concept of a separate legal entity means that the assets and liabilities of a Private Limited Company are distinct from those of its directors. This separation of management from ownership allows for greater flexibility and protection of personal assets in case of any financial or legal issues faced by the company.

Perpetual Succession: The term “perpetual succession” refers to the uninterrupted existence of a Private Limited Company, which means that the departure, death or bankruptcy of any member will not affect the company’s operations. For instance, if one out of 200 members of a Private Limited Company dies or leaves, the company will continue to exist uninterrupted, thanks to the benefits of online company incorporation. Moreover, due to the optional registration, other sole proprietors may also use the same name.

Credibility: The public availability of details related to a Private Limited Company enhances the company’s authenticity and credibility. This, in turn, helps to build trust among customers towards the company.

Helps in Equity Raising: A Private Limited Company has the authority to raise equity funds from sources such as Private Equity Firms and other similar entities, allowing the promoters of the company to raise capital and grow the business.

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Documents Required for Private Limited Company Incorporation in India

  • Photocopy of PAN card of the directors.
  • To provide address proof for the directors, you need to submit documents such as Voter ID card, Driver’s License, Passport, etc.
  • Proof of registered office address can be provided through documents such as electricity bills, telephone bills, or any other utility bills.
  • Passport-sized photographs of the directors and shareholders.
  • Occupation of directors.
  • Share capital amount and preferred shareholding ratio.
  • In case of owned premises, you must provide the ownership and sale deed as proof.
  • If the registered office of the company is rented, you must submit a valid rent agreement along with a No Objection Certificate (NOC) from the landlord of the premises.
  • Proof of nationality is required for foreign national members.

Private Limited Company Incorporation Process

  • The first step in online company Incorporation is to verify the availability of the desired company name.
  • After finalizing the name of the company, the next step is to apply for a Digital Signature Certificate (DSC) and Director Identification Number (DIN).
  • After obtaining the Digital Signature Certificate (DSC) and Director Identification Number (DIN), the next step in registering a private limited company is to prepare and file the Memorandum of Association (MoA) and Articles of Association (AoA) with the Registrar of Companies (RoC).
  • After the registration process is completed, the next step is to file an application for the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) of the company. These are mandatory for conducting business operations and complying with tax laws in India.
  • Certificate of incorporation, PAN & TAN will be issued.
  • Finally, after obtaining the certificate of incorporation and PAN/TAN, the private limited company can open a current account in the name of the company with any bank of their choice.
    Additionally, the application form must be accompanied by all the necessary documents as per the requirements for online company Incorporation.

Certifications Bay, as your consultant for private limited company Incorporation, offers comprehensive support throughout the online registration process in India. Our services include guidance on proper documentation, checking company name availability, and assisting with the application form.

We recognize the importance of time and coordination, ensuring timely follow-ups and clear communication to meet our clients’ needs. Our focus extends beyond paperwork, aiming to make your private limited company incorporation process smooth and hassle-free.

Requirements for Registering a Private Limited Company in India

  • A minimum of two shareholders and two directors is necessary to establish a private limited company.
  • In a private limited company, the directors and shareholders can be the same individuals.
  • The company must have at least one director who is a resident of India.
  • There is no requirement for a minimum amount of capital to be deposited during the incorporation of a private limited company.
  • The digital signatures of the first directors are mandatory for private limited company Incorporation.
  • Each director of the company must obtain a Director Identification Number (DIN) before being appointed as a director in a private limited company.

FAQs on Private Limited Company Incorporation in India:

What is a Private Limited Company?

A Private Limited Company is a type of business entity registered under the Companies Act, 2013, with limited liability for its shareholders and certain restrictions on ownership. It is a separate legal entity distinct from its members.

Why should I choose a Private Limited Company structure?

Opting for a Private Limited Company structure offers limited liability protection to its shareholders, separates personal assets from business liabilities, enhances credibility, and facilitates easier access to funding and investments.

What are the requirements to register a Private Limited Company in India?

The requirements typically include a minimum of two directors and shareholders (who can be the same individuals), a registered office address in India, a unique company name, and compliance with statutory regulations.

How long does it take to register a Private Limited Company in India?

The registration process usually takes between 15 to 30 working days, depending on various factors such as document submission, processing time, and the accuracy of information provided.

What documents are required for Private Limited Company Incorporation?

Commonly required documents include identity and address proofs of directors and shareholders, proof of registered office address, Memorandum of Association (MOA), Articles of Association (AOA), and a PAN card. Contact us for complete list of documents requirements tailored for you need.

Do foreign nationals or Non-Resident Indians (NRIs) need special permissions to register a Private Limited Company in India?

Foreign nationals and NRIs can register a Private Limited Company in India, subject to compliance with the Foreign Direct Investment (FDI) regulations and obtaining necessary approvals such as Director Identification Number (DIN) and Digital Signature Certificate (DSC).

What are the ongoing compliance requirements for a Private Limited Company after registration?

Post-registration, a Private Limited Company needs to comply with various statutory requirements such as filing annual returns, conducting regular board meetings, maintaining financial records, adhering to taxation regulations, and updating changes in company details with the Registrar of Companies (ROC).

Can I convert my existing business structure into a Private Limited Company?

Yes, it is possible to convert existing business structures like sole proprietorship or partnership into a Private Limited Company through processes such as conversion or incorporation, subject to meeting eligibility criteria and following legal procedures.

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