Overview of Private Limited Company
A Private Limited Company Registration is a privately maintained small business existence, which is one of the highly recommended means to start a business in India. The Companies Act 2013 governs Pvt. Ltd. company registration in India. While, minimum of 2 shareholders are required to start a private company, the higher limit of members is 200 as per the Companies Act, 2013. If a private limited company faces financial risk, its shareholders are not subject to sell their personal assets, i.e. they ought to have limited liability.
For online company registration, there must be a least of 2 directors while a maximum of 15 directors can be appointed in a company. The proposed director must have attained the age of 18 years. A foreign national can also become a director of a private limited company in India. There is no minimum paid-up capital required for a Pvt. Ltd. company registration. Every private limited company must use “Pvt.Ltd.” after their name.
A private limited company has never-ending existence. A private limited company holds on existing even in the case of death or bankruptcy of its Members. A private limited company does not have any relationship with the public; they aren’t permitted to ask for any collateral from the public or public sectors. In a private limited company, people are not entitled to transfer shares, which protect takeovers of private limited companies from big enterprises.
Benefits of Private Limited Company Registration
- EASE OF FORMATION: A Private Limited Company can be formed by two persons only, by complying with the prescribed formalities of the Companies Act. With Spice forms, this is the fastest way to register a company
- SEPARATE LEGAL ENTITY: The biggest advantage of a Private Limited Company is that its identity is distinct from that of its members. A company is a separate person having its own rights & Obligations.
- PERPETUAL SUCCESSION: In case of the death of the owner or transfer of shares, your business won’t get affected. There will be no effect on the firm’s continuance.
- LIMITED LIABILITY: The greatest benefit of a Private Limited Company is limited liability. If any liability arises then its member is not personally affected; members are only liable for unpaid shares held by them and not more than that. Stakeholders are not liable for corporate debts and liabilities
- GREATER FLEXIBILITY: A Private Limited Company is required to perform lesser legal formalities as compared to a Public Limited Company. It enjoys special exemptions and privileges under the company law. Therefore, in a Private Limited Company, less compliance is required.
- SECRECY: A Private Limited Company is not required to publish its accounts or file several documents. Therefore, it is in a better position than a public company to maintain business secrets.
- INVESTMENT: Flexibility to raise investments or loans from NRIs and Foreigners. Easy to raise investments and corporate loans
- TRANSPARENCY: Private Limited Company enjoys enhanced transparency thus able to win the trust of the general public.
- MINIMUM COMPLIANCE: Private Limited Company Registration enjoys enhanced transparency thus able to win the trust of the general public.
Documents Required for Private Limited Company Registration
- Declaration by the subscribers and by the directors
- A confirmation for the address of the office
- Two months utility bills copy
- Certificate of incorporation of the Outer Country body corporate [If applicable]
- A resolution passed by the global Company [If applicable
- A recommendation declared by the promotional Company [If applicable]
- The interest of the directors from other entities [If applicable]
- Nominee’s assent
- Identity proof and residential address of the subscribers and the nominees
- Identity proof and residential address of Applicants
- The Declaration/Resolution of the unregistered companies
- DSC(Digital Signature Certificate)
- Any other document [If required]
Note: Acceptable documents for ID Proof are given below:
- Voter ID
- Aadhaar Card
- Passport
- Electricity Bill
- Ration Card
- Telephone Bill
- Driving License
Acceptable documents for Address Proof are listed below:
- Bank Statement
- Electricity Bill
- Mobile Bill
Inclusions for Private Limited Company Registration
- Digital Signatures of 2 directors
- Articles of Association
- Memorandum of Association
- Company PAN
- Company TAN
- Certificate Of Incorporation
- Onboarding Kit
FAQ – Frequently Asked Questions
What are the rules for picking a name for a private limited company?
The registrar of companies (RoC) across India expects applicants to follow a few naming guidelines. Some of them are subjective, which means that approval can depend on the opinion of the officer handling your application. However, the more closely you follow the rules listed below, the better your chances of approval. First, however, do ensure that your name is available.
How much time is taken to register a private limited company in India?
If you have all the documents in order, it will take no longer than 15 days. However, this is dependent on the workload of the registrar.
Do I need to be physically present during this process?
No, new company registration is a fully online process. As the entire process is digital, there is no requirement to be physically present at all. You would need to send us scanned copies of all the required documents & forms.
What documents are required to complete the process?
All directors must provide identity and address proof, as well as a copy of the PAN card (for Indian nationals) and passport (for foreign nationals). No objection certificate must be submitted by the owner of the registered office premises.
Does a private limited company have continuous existence?
Yes, so long as the annual compliances are met, the private limited company will continue to exist. If you do not comply with the requirements, it will go dormant, until it is struck off the register altogether.
Is it necessary to have a company’s books audited?
Yes, a private limited company must hire an auditor, no matter what its revenues. In fact, an auditor must be appointed within 30 days of incorporation. Compliance is important with a private limited company, given that penalties for non-compliance can run into lakhs of rupees and even lead to the blacklisting of directors.
What are articles of association and memorandum of association?
These documents contain the rules, vision, and mission of your organization, and define them. Additionally, the exact business and the roles and responsibilities of shareholders and directors.
What is the minimum capital requirement to register a private limited company in Delhi?
There is no minimum capital required for starting a private limited company.
Can the limited liability partnership (LLP) be converted to a private limited company?
No, one cannot convert an LLP into a private limited company as it is not under MCA. The LLP Act, 2008, and the Companies Act, 2013, both don’t have any provisions on the conversion of the LLP is a private limited company. However, if one wants to expand their business they can register a new private limited company with the same name. The LLP company needs to just issue a no-objection certificate.
If there are no partners available, then can one register their family members in the company?
Yes, it is good to register a family member as a partner. At a later stage, one can change this or transfer shares of the directors.
