Overview on Private Limited Company Registration
Once you have decided to start a company, the first and foremost requirement is to select a favourable business structure to register the company in India. The choice of the right business structure will affect many factors starting from your business name, your liability towards your business, and also how to file your taxes and statutory dues. The financial and operational success of the company depends on the business structure, according to the process of online company registration in India.
One of the most cited legal structure options for businesses in India is a Private Limited Company Registration. Normally, Start-ups and growing companies prefer to have online Company Registration as a private Limited company because it allows outside funding to be raised easily. It limits the liabilities of the shareholders and also enables them to offer Employee Stock Options (ESOP) to attract top talents. If you want to start a company in India, make sure you get Online Company Registration from our experts' help.
Benefits of Private Company Registration in India
- Private Limited Company can have a minimum of two members and a maximum of fifty members.
- Directors have limited liability to creditors.
- If there is any default, the banks or creditors need to sell off only the company's assets but not personal assets.
- Loans can be issued in the name of the company and to make investments in different companies.
- It will be considered as a separate legal entity.
- Directors will have limited liabilities. They will not be personally liable for the company's affairs.
- Tax benefits are available to the directors of the company.
- Right from the time of establishment, the power to hold and dispose of the property is with the company.
- The company will build goodwill for its brand.
- With the help of company body structure, there can be a global reach.
- To set up a platform to deal with suppliers, industries, vendors, and customers.
- A registered company can sue or be sued in its name. The name of the entrepreneur will not be used here.
- It is easy to distinguish oneself from others by entering into a corporate environment.
- You can collect money from the general public to make an investment in the company.
Regulatory Authority for Company registration in India
The primary regulatory authority for company registration process in India is the Ministry of Corporate Affairs (MCA). When an individual wants to establish a company, then all information and documents have to be submitted to the MCA for processing the application. After the company is incorporated specific documents have to be filed with the Registrar of Companies.
Check List for Registering a Private Limited Company in India
- Minimum 2 Person/Directors
To register as a private Limited company in India, a minimum of two persons is required, who must act as shareholders or directors of the company. The highest number of shareholders a company can have is 200, and a company can have up to 15 directors. If the shareholders are foreign nationals then the requirement of submitting a passport and other documents is mandatory.
- Resident Director
At least one director of the company needs to be a resident in India. Any person if he or she stays in India for at least 182 days during the financial year irrespective of their citizenship shall be deemed to be a citizen of India. However, as per the Finance Act 2020 and the Income Tax Act, 1961 if an individual stays in India for more than 120 days, then they would be considered as a resident Indian. However, this would depend upon the amount of taxable income earned in India. If the taxable income earned in India is more than Rs.15, 00,000/- per annum.
- Capital Requirement
Investment must be made as per the necessity of the business, and there is no least capital requirement for a company. However, while measuring capital, even the Government fee is added. Minimum capitalisation requirements are considered under this.
- Unique Name of Company
The suggested name of the company must not be similar to any existing company or LLP. Moreover, you also need to verify the trademark registry to ensure that the name is not similar to any registered or applied trademark in India. The name of the company must not go against any provisions of any intellectual property law in force in India. The name must not go against the Copyrights Act or the Trade Marks Law of India.
- Registered Office
The registered office does not need to have a commercial space. Even a rented home can become a registered office, after obtaining an NOC from the landlord.
Process of Private Company Registration in India
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- Application for DSC (Digital Signature Certification)
- Application for Din ( Director Identification Number)
- Name Availability of Company
- Filing Memorandum of Association and Articles of Association Online
- Application for PAN and TAN
- Certificate of Incorporation
- Opening Bank Account
- Application for DSC
The first step in making an application for company registration is applying for a digital signature certificate. A digital signature certificate is a legal document which is used now days for verification of information. Usually the digital signature certificate is used for signing some electronic documentation. When incorporating a company, the first step is to apply for the DSC with the Ministry of Corporate Affairs.
- Application for DIN (Director Identification Number)
Once you have applied for the DSC, it is crucial to apply for the director identification number. The DIN would indicate that all compliances have been met by the company when recruiting a director. The applicant for company registration has to apply for the director identification number for the company.
- Name Availability of the Company
Next step is to check the company name. This process is mandatory under company registration. When you check the name of the company, the portal will intimate you if the name is already chosen and not going against any provisions of intellectual property law in force in India. Checking the name availability of the company can be carried out online on the MCA portal.
- Filing Memorandum of Association and Articles of Association Online
The applicant for company registration has to file documents such as the memorandum of association and articles of association online. Filing these documents would provide legal certainty of formation of the company. This process must be carried out through the Ministry of Corporate Affairs Portal.
- Application for PAN and TAN
After all filings are complete, the applicant must consider applying for securing a PAN and TAN number.
- Certificate of Incorporation
Once everything is over, the MCA and ROC will review the application and if there are no issues, then a certificate of incorporation would be granted to the applicant. The certificate of incorporation is a legal document which provides some form of legal status to the company.
- Opening a Bank Account
After securing the certificate of incorporation, the applicant must open a bank account in the name of the organisation. This would be required for carrying out transactions on behalf of the company. Hence a corporate bank account must be opened by the applicant.
Why is it Important to Check the Name for Private Company Registration?
It is essential to check the name of the company before it is being registered. If you check the name of the company before it is registered then it will avoid any form of overlapping. Plus additional benefit is that the company would have any similar names of companies that have been already used.
For example if a company is registered with a particular name, then the name of the company may be similar to another company’s name. This will cause some form of confusion in the eyes of consumers.
Apart from this it is important to check the names of the company in order to be compliant with laws of the land. The name must not be offensive to any national emblems or religion. Apart from this, the name must be according to the provisions of the intellectual property law.
For example, the name of the company is protected by an intellectual property right known as trademark. It is important to ensure that this does not breach any other marks or company rights. Trademark represents the particular brand of the company.
The name of the company can be checked as per the requirements of the Ministry of Corporate Affairs (MCA) and respective authorities like the IP office of India.
Documents required for Private Company registration in India
- Copy of PAN Card or Passport of directors (Foreign Nationals &NRIs)
- 2 Passport size photographs of directors of the company
- ID proof such as Aadhaar Card or Voter identity card of directors
- Copy of address proof rent agreement or property papers
- Electricity or Water bill of company place
- Landlord NOC in case of rented office
- In the case of personal property, a copy of sale deed or property deed
- For foreign nationals, a notarized copy of the passport must be submitted mandatorily. Only valid documents need to be submitted. The residence proof documents like a bank statement or electricity bill must be less than two months old.
- Registered Office Proof
- To get company registration in India, the company must have a registered office. In order to prove the functionality of the registered office, a recent copy of the electricity bill or the property tax receipt or water bill must be submitted. Along with the rental agreement, utility bill, or the sales deed and a letter from the landlord with her/his consent to be used to register the particular address as the registered office.
Recent updates- Company Registration
Mar 9, 2020- SPICEe+ Form requires Mandatory Registration of EPFO & ESIC
After the introduction of SPICe+ (e-form) for incorporation of company, registrations for EPFO and ESIC shall be mandatory for all the registered organizations, and none shall be separately issued by the respective agencies.
Mar 06, 2020- Company Registration must be done in a new MCA portal
A Public, Private, and one person company registration in the EPFO, ESIC will be done on the new MCA portal. It simplifies the registration process by using a new web form SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus), integrating ten services from various departments.
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