What is Company Registration?
Private Limited Company, it is the best form of starting a business in corporate structure, Private limited company registration has been always considered as 1st choice by startup community, if you are building scalable products or service and aiming for $ 100 Million dollar company in 3 to 5 years and planning for company registration then Private Limited company is the best choice. Company registration in India offers limited liability and legal protection to its shareholders, and also provides flexibility to offer employee stock option to founding employees. Angel investor, venture capitalists, etc. prefer to invest in a Private Limited Company over other business structures.
A Private Limited Company is required to hold at least 5 board meeting in a year (i.e. at least four board meetings in one calendar and at least one board meeting in each quarter), hold an Annual General meeting within 6 months from the end of the financial year and annual returns with Ministry of corporate affairs. Private Limited Company is more favorable and has more credibility than an Limited Liability Partnership (LLP) or General Partnership or Proprietorship. Approximately, more than 100,000 companies are registered every year in India.
At Enterslice, we are continuously assisting Start-ups to understand how to register a private limited company. In a private limited company must have at least two directors and shareholders at the beginning.
A Private Limited Company Registration Package includes
- Two DINs & Two DSCs.
- Reservation of Name for the company.
- Drafting of MOA & AOA and filing of eMOA&eAOA.
- Application for PAN & TAN.
- Government fee (for filing all the forms on MCA portal).
- CIN No. for the company.
Service Tax Extra on Professional Fees. MCA Fees estimated based on official stamp duty prevailing in NTC of Delhi.
Advantages Private Limited Company Registration
Liability of Members and Directors of a Private Limited Company is limited to the shares held by them. It protects the personal assets of the directors and shareholders. In the case of any financial distress to the company or if the company faces any loss, Directors, and Shareholders will not be personally liable for anything.
Separate Legal Entity
The company is a legal entity, capable of owing funds and property on its own name. Company is a legal person and it has complete right to control, manage and dispose of the property vested in its name. Property of the Company is not the property of its Shareholders. Company can sue any person and be sued in its own name.
Companies are often taxed at a lower rate than that of other forms of businesses. Companies pay corporate tax on their taxable profits and are exempted from higher tax rates. Government also from time brings exempted tax rates for certain types of companies.
Private limited company enjoys perpetual succession i.e. it continues to exist even if the shareholders of the company dies, or ceases to be the member of the member of the company. Life of business is not affected due to any change in the status of shareholders. It continues to exist till it is wound up in accordance with the provisions of the relevant law.
Scope of Expansion
The Scope of expansion is great in a private limited company. It is easy for a company to raise money for diversifying its business since the companies have to comply with various stringent regulations, they enjoy good credit worthiness with various financial institutions. It is very convenient for the companies to explore global market as compare to an LLP, Partnership or a Proprietorship.
Creation of Brand Value
Being a registered entity, a Private Limited Company is more trustworthy. Employees feel more secure in joining a private limited company, vendors feel more comfortable in offering credit, Investors and customers are more likely to be attracted towards a sound and organized corporate structure, which complies with various stringent legal provisions. A private limited company is easily recognized in the market in comparison to LLP.
Valuation and Customer
Valuation of the business is an important aspect of a company and high valuation comes from loyal customers. You should work on a business model with a higher lifetime value of a customer; Entrepreneur should focus on higher assessment of company by offering the unique value proposition to the customer life.
Company Registration Process:
DSC (Digital Signature Certificate)
Digital Signature Certificate is a digital equivalent of a handwritten signature which has an extra data attached electronically to any message or a document. All the directors of a company shall have a digital signature, which will be used for the purpose of registration, ROC filing, Tax returns, etc. For these purposes, you need Class II DSC.
DIN (Director Identification No.)
DIN is a unique Identification No. for existing or future Director containing personal information about him. All the Directors of a company must have DIN.Once your digital signature is approved, you will get an email from the Registrar of Companies that now you are eligible to be appointed as a director. A DIN is approved in just one working day.
Approval of Name of the Company by the Registrar of Companies
To get the name of your company approved, first of all, we will do the trademark search and check the availability of name on MCA portal, then we will proceed to file a Name approval application to ROC on your behalf. (Selected name of the company shall not contain any word prohibited in Section 4(2) & (3) of the Companies Act, 2013.)
Final Incorporation and CIN of the Company
After name approval from the ROC, we will proceed with final incorporation. We will file final incorporation form with all supporting documents, along with eMOA&eAOA and application for PAN & TAN. Registrar of companies takes three working days complete the approval procedure for incorporation of the company.
Documents Required for company Registration
From Directors and Shareholders
- Copy of PAN card or passport or Election ID card or Adhar Card
- Bank statement/Telephone or Mobile Bill (Not older than two months)
- Voter’s ID/Passport/Driver’s License
- Passport sized photographs of all the Directors and Shareholders
- Scanned copy of Signature (Same as on the PAN card)
For the Purpose of Registered Office
- Utility Bill (Not older than two months)
- Scanned copy of rent agreement with NOC from the owner