The concept of producer company has been introduced to organize the agriculture-related actives...
There are many types of companies that can be incorporated through our governing law, and Private Limited Company is one of them. Private Limited Company is one of the most popular types of corporate legal entity in our country. The Companies Act, 2013, governs its incorporation. As per the Companies Act, 2013 minimum of two shareholders is required to start a private company, while the higher limit of members may go up to 200. The Ministry of corporate affairs (MCA) recently by launching the SPICE+ has simplified the process of Private Limited Company Registration, a step towards increasing the ease of doing business in India. In this write- up, we shall discuss in detail about the process of Private Limited Company registration in India.
The Characteristics of Private Limited Company are as follows:
As per the provisions of the Companies Act, 2013, a Private Limited Company requires a minimum of 2 members for its incorporation. The maximum number of members may go up to 200.
In Private Limited Company, the financial liability of each member or shareholder is limited to their shares. This means if the Company goes into loss under certain circumstances, the shareholders will not risk losing their personal assets. Although committing a fraud related to the Private Limited Company would negate an owner’s limited liability protection.
One of the advantages of a Private Limited Company is its perpetual succession, even after the owner dies or leaves the business. The Company keeps on existing in the eyes of the law until it is legally dissolved.
According to the Companies Act, 2013, a Private Limited Company needs to appoint at least two directors. With the existence of two directors, the Company can begin with its operations.
There is no requirement of minimum paid up capital.
A Private Limited Company is recognized as a separate legal entity with continued existence. The Company can have a PAN number, bank accounts, licenses, approvals, assets, and liabilities in its unique name.
A Private Limited Company can gather funds from debentures as well as from the stockholders. A registered Private Limited Company attracts numerous angel investors and venture capitalists, which allows the Company to expand and raise its funds for the growth of the business.
Before starting a Private Limited Company, there are certain requirements that need to be fulfilled. Given below is the list of requirements that should be fulfilled before registering a Private Limited Company in India:
The registration of a Private Company in India cannot be done without proper identity proof and proof of address. The detailed list of documents required to incorporate a Private Company in India is given below:
In case the Director/shareholders are a foreign national, then, the documents required are as follows:
Following are the steps involved in Private Limited Company Registration:
The first step towards incorporating a Private Company is to get the name of the Company approved from MCA. You can apply for two names through incorporation form i.e., SPICE+. The Registrar will choose between the two names and shall approve one. Before applying, it should be remembered that the name you apply for should not be similar to any of the existing registered Companies with MCA.
Since the registration process of the Company is online, Digital Signature Certificate (DSC) is required for signing the e-forms of company incorporation. DSC can be obtained from any authorized agency recognized by the Government of India. DSC is compulsory for all subscribers and witnesses in the memorandum and articles of association. The cost of obtaining DSC varies depending upon the agency from where you get it. You should obtain either class 2 or class 3 category of DSC. In class 2 category, the identity of the person is verified against the pre-verified database, whereas under class 3 category, the person needs to be present physically before the registering authority to prove their identity.
It is mandatory to obtain DIN for anyone who wishes to become the Director of the Company. There are a couple of ways of applying for DIN. One can apply for the Director Identification Number (DIN) through the Spice+ form. The other way to apply for DIN is by filling the DIR-3 form.
The Memorandum of Association (MoA) and Articles of Association (AoA) are crucial documents for a Private Limited Company registration in India. The Memorandum of Association represents the character of the Company, while AoA comprises the internal rules and regulations of the country. Both MoA and AoA can be filed online on the MCA portal.
After all the above-mentioned formalities are done, one shall proceed for making an application of incorporation through the filing of Spice+ Part B form accompanied by SPICe_MOA, SPICe_AOA, AGILE-PRO, and INC-9. Through the SPICe form, you can also apply for Company’s PAN and TAN by using form 49A for PAN and 49B for TAN. These forms will be auto-generated by the system after the submission of the SPICe form. After uploading the required forms, the application of company incorporation is successfully submitted the application is processed by the Department. If everything is found satisfactory, MCA shall issue the Certificate of Incorporation.