Private Limited Company Incorporation
Get in touch with Certifications Bay, India’s top compliance service provider, and expedite your private limited company registration process. Our action-oriented approach ensures that we invest sustained efforts to complete the registration promptly. Contact us now to learn more about how we can help you with incorporating your private limited company.
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.
By whom is the Private Limited Company regulated in India?
The Companies Act, 2013 regulates the incorporation of Private Limited Companies.
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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 registration. 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.
Types of Private Limited Company
According to the Memorandum of Association (MoA), the liability of the shareholder in this type of Private Limited Company is limited to the nominal amount of their shares only. Therefore, shareholders are not obligated to pay more than the capital invested in the company.
In this type of private limited company, the liability of each member is limited to the amount committed by them in the Memorandum of Association (MoA). This means that a member’s liability is restricted to a specific guaranteed amount and they cannot be held accountable for more than that.
To put it simply, during the winding up of the company, a shareholder will only have to pay the nominal amount mentioned in the MOA.
An Unlimited Liability Company (ULC) is a type of corporation where there is no limit on the liability of its members. As a result, the liability of the members increases with the company’s debts and liabilities. This means that creditors of the company can hold shareholders accountable for the company’s debts and liabilities in case of winding-up.
Characteristics of a Private Limited Company
A minimum of two members is required for a private limited company registration, and it can have up to 200 members.
Previously, a minimum paid-up capital of Rs. 1 lakh was required for online company registration, but this requirement has now been abolished.
A private limited company is required to have either "Private Limited" or "Pvt. Ltd." at the end of its name.
In a private limited company, the shares can be transferred freely, subject to any restrictions specified in the Articles of Association of the company.
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 registration.
Each director of the company must obtain a Director Identification Number (DIN) before being appointed as a director in a private limited company.
Documents Required for Online Company Registration 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.
Steps for Online Pvt Ltd Company Registration Process
- The first step in online company registration 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 registration.
Certifications Bay, as your private limited company registration consultant, will provide comprehensive assistance throughout the process of online company registration in India. Our services include assisting with proper documentation, checking the availability of the company name, and filling out the application form.
We understand the value of time and coordination, which is why we ensure proper follow-ups and acknowledgment to meet our clients’ needs. Our services go beyond mere paperwork and applications to ensure that your private limited company registration process is smooth and hassle-free.
Our role as consultants for Private Limited Company Registration.
We will offer you expert guidance and support throughout the entire process of registering a Private Limited Company in India.
We will aid you in the documentation process to ensure that all necessary documents are available and in order.
Our team of experienced professionals will assist you in filling out the application form with expertise.
Our consultants will provide support for opening a bank account.
We provide you with a Digital Signature Certificate (DSC) and Director Identification Number (DIN), which are essential requirements for Private Company Registration.
If you have any queries, we will provide you with the best possible solution.
Conclusion
To summarize, it is crucial to have a clear understanding of the process of incorporating a private limited company before proceeding with pvt ltd registration in India. Any incorrect or incomplete information can cause delays in the registration process.
To make the process of pvt ltd registration in India seamless, our team of consultants at Certifications Bay will guide you through the online company registration process, ensuring a hassle-free experience. We prioritize accuracy and efficiency to avoid any inaccuracies or issues.
For expert and professional pvt ltd registration services, contact Certifications Bay today.