Private Limited Company
Company Registration in India
Registering a Private Limited Company in India involves several key steps. Firstly, directors must obtain Digital Signature Certificates (DSCs) and Director Identification Numbers (DINs). Next, the company name must be approved, followed by filing the incorporation documents with the Registrar of Companies (RoC). These documents include the Memorandum of Association (MoA) and Articles of Association (AoA). Additionally, proof of registered office address and identity/address proofs of directors are required. Once approved, the company receives a Certificate of Incorporation, making it a legal entity. The process ensures compliance with the Companies Act, 2013, providing limited liability protection and scalability opportunities for businesses.
Documents Required
- PAN Card
- Aadhaar Card
- Passport (Foreign Nationals Only)
What is a private limited company?
A Private Limited Company is a business structure that offers limited liability protection to its shareholders, restricting ownership to privately held shares. It requires at least two shareholders and directors, with a maximum of 200 shareholders. This structure enables the company to raise funds and expand while safeguarding shareholders’ personal assets. Private Limited Companies are regulated by the Companies Act and enjoy perpetual succession, ensuring continuity despite changes in ownership
Types of Private Limited Companies:
- Company Limited by Shares: Shareholders’ liability is limited to the nominal share amount mentioned in the Memorandum of Association.
- Company Limited by Guarantee: Member liability is limited to the amount of guarantee specified in the Memorandum of Association. This guarantee is invoked only during winding up.
- Unlimited Companies: Members of unlimited companies have unlimited personal liability for the company’s debts and liabilities. However, they are still considered a separate legal entity, and individual members cannot be sued.
Expert Consultant for Company Registration
A Private Limited Company Incorporation is one of India's most popular business structures. It offers several advantages and some disadvantages, let us explain.
Limited Liability: Shareholders' responsibility is restricted to the extent of their capital contribution, safeguarding personal assets from the company's financial obligations and liabilities.
Distinct Legal Identity: A Private Limited Company possesses an independent legal identity distinct from its proprietors. It has the capacity to own assets, engage in contractual agreements, and initiate or defend legal actions under its own name.
Continuous Existence: The company's existence persists irrespective of shifts in shareholders or directors. Its existence is not contingent upon the lifespan of its associates.
Ease of Funding: Raising capital by issuing shares to investors, venture capitalists, or angel investors is easier. This structure attracts external investment.
Tax Benefits: Private Limited Companies may qualify for various tax benefits and exemptions, making them tax-efficient entities.
Credibility and Trust: Having "Pvt. Ltd." in your company name often instills more confidence and trust in customers, suppliers, and partners.
Limited Liability: Shareholders' responsibility is restricted to the extent of their capital contribution, safeguarding personal assets from the company's financial obligations and liabilities.
Distinct Legal Identity: A Private Limited Company possesses an independent legal identity distinct from its proprietors. It has the capacity to own assets, engage in contractual agreements, and initiate or defend legal actions under its own name.
Continuous Existence: The company's existence persists irrespective of shifts in shareholders or directors. Its existence is not contingent upon the lifespan of its associates.
Ease of Funding: Raising capital by issuing shares to investors, venture capitalists, or angel investors is easier. This structure attracts external investment.
Tax Benefits: Private Limited Companies may qualify for various tax benefits and exemptions, making them tax-efficient entities.
Credibility and Trust: Having "Pvt. Ltd." in your company name often instills more confidence and trust in customers, suppliers, and partners.
Compliance Burden: Face regulatory demands, including financial reporting, filings, and audits.
Complex Setup: Process and cost for managing are higher than more superficial structures.
Share Limits: Restricted share transfers; max 200 shareholders in India.
Public Disclosure: Financial info is publicly viewable, impacting privacy.
Exit Complexity: Selling or leaving is more complicated than with other structures.
Slower Decisions: The involvement of shareholders and directors may slow choices.
Complex Setup: Process and cost for managing are higher than more superficial structures.
Share Limits: Restricted share transfers; max 200 shareholders in India.
Public Disclosure: Financial info is publicly viewable, impacting privacy.
Exit Complexity: Selling or leaving is more complicated than with other structures.
Slower Decisions: The involvement of shareholders and directors may slow choices.