Private Limited Company Registration

Hassle-Free and Efficient Online Approach

Personalized Expert and Account Advisor

Personalized Guidance from Industry Experts

Features of Private Limited Company.

• No Minimum Capital Needed: The Corporations Act, 2015 of India cancelled the requirement for minimum capital to start a private limited company, allowing access to many entrepreneurs

• Membership: It requires a minimum 2 members & maximum of 200

• Limited Transferability of Shares: In the case of a private limited company, you cannot readily transfer shares. It ensures control over the business by keeping ownership within a small circle

• Private Limited: The name of the company should contain private limited, meaning it's private and not public

• Private Limited Company Dispensations and Exemptions: Private limited companies benefit from certain dispensations or exemptions that are not permitted to public companies

• Director-Person Resident Indian: At least one director of the business should be a resident in India with respect to who exactly lives near any way they ought not stop by from outside on conveyance-making finds

• Limited Liability: The liability of shareholders is, at most, limited to their holdings. They do not risk more than what they have invested in the company when it comes to debts owed by that business

• Foreign Direct Investment (FDI): Private limited companies can receive FDI up to 100% in any sector without needing government approval, other than sectors where domestic investment is restricted

• Credibility: A private limited company is more credible, and it becomes much easier to find investors or take loans.

• Limited liability Protection: The company is a separate legal entity from the owners. That is to say, it can acquire property, create liabilities, and enter into contracts under its own name

• Ownership and shareholders: Shareholders own the company in exchange for buying shares of stock (investing) in it.

• Management: Private limited company is managed by a board of directors, who serve to oversee the company and are appointed members solely for being elected or voted in/out by shareholders.

• Minimum Capital Requirements: Although there is no longer a legal framework for minimum capital, the company must maintain sufficient capital to meet its operational needs.

• Continuous Existence: The company continues its existence despite change of ownership or demise/malady of its members. It lasts forever unless it is diluted.

• Privacy and Confidentiality: Private limited companies are not obliged to disclose as much information as the public, meaning they can maintain a level of privacy and confidentiality about the affairs of their business.

• Number of Directors: Minimum 02 (two) and Maximum limit is fifteen directors.

• Perpetual Succession: The company continues to remain in existence even when the members change, promoting continuity of business.

• Authorized and Paid-up Share Capital: There must be an authorized share capital of the company as per the Companies Act of 2013; however, post 1 April 2014, there is no minimum paid-up capital.

• The name must be ‘Private Limited’: Hence, this is how you know if it is a private company (rather than another type of business form) and while one reads the next question.

• Prospectus: A private limited company does not issue a prospectus, as it is not inviting the public to subscribe to its shares like in the case of a public limited company.

• Index of Members: Unlike public companies, where it is mandatory to maintain an index for members, private limited companies are not required to do so.

Why choose Private Limited Company.

Advantages

Disadvantages

An important benefit of a private limited company is the limited liability it offers to shareholders, ensuring that their financial responsibility is limited to their shares. Consequently, if the business faces financial difficulties and must wind down, stockholders’ personal assets are protected.

Owning a private limited company comes with several disadvantages, including the fact that shares cannot be traded on public stock exchanges, limiting access to capital. Additionally, growth potential may be constrained due to a capped number of shareholders and directors, which can hinder the company’s ability to expand and attract new investment. This structure can restrict opportunities for scaling the business compared to public companies.

Eligiblity and Requirements to Register a Private Limited Company.

Minimum two shareholders and two directors are necessary to register a private limited company. At least one Indian resident director documents, such as the MOA and AOA, along with DIN and DSC, are the necessary key factors. Register Company Name must be unique, related, and also as per MCA norms. To simplify the registration process, Vakilsearch offers a service to check name availability, as this helps in making sure your selected name is legal.

• The minimum requirements for registration ensure that entities meet basic legal and operational standards before commencing business activities. Below are the criteria for the same:

• Minimum Shareholders: 2 Or More (Need at Least One) Those shareholders are going to either an individual or corporate entity

• Minimum Directors: Two directors have to be appointed, and one of them has Indian residency

• Authorised and Paid-Up Capital: There is no provision regarding minimum paid-up capital, but the authorised capital should be sufficient for meeting the needs of the company’s business at the state or union territory (regulatory requirement).

Documents Required for PVT Ltd Company Registration

Minimum Requirements for Registration

To register a Private Limited Company, essential documents include identity proof and address proof of all directors and shareholders, such as Aadhar cards or passports. Here is a list of documents for the same :

• Proof of Identity: PAN (self-attested copy of Pan card), Aadhar Card, Passport & Voter ID for Indian Nationals. This could be in the shape of a notarized passport if you are an outsider.

• Proof of address: Not more than two months old mobile bill/electricity bill/corporate tax receipt/bank passbook.

• Office documents: Business address proof, utility bills, lease/rent agreement, and NOC from landlord.

• Memorandum of Association (MoA): It is a document that legally describes the purpose and states which part it plays in the operations of a firm.

• Articles Of Association (AoA): The AoA of a company is its internal rule book, setting out how the company will be managed and controlled.

• DIN of the director: Each and every director in a company ought to have DIN

• Class 2 Digital Signature Certificate (DSC): It will be needed for the e-signing of incorporation documents and other filings with authorities.

• Relevance: Business or activities done by the company

• Legal Compliance: It should be proper in accordance with MCA guidelines and shall not have any banned words or phrases.

• No Confusing Terms: One should not construct an incorrect or irrelevant impression about the events and relationships.

Steps Involved In Private Limited Company Registration.

Step 1 : Procuring a Digital Signature Certificate (DSC)

[Your Brand Name] is a [brief description of your business or service]. We are passionate about [your mission statement].

Step 2: Get Director Identification Number (DIN)

We offer a [brief explanation of how your product or service helps your customers]. Our process is [simple/efficient/convenient] and [positive adjective] for you.

Step 3: Naming Approval Process

Our pricing varies depending on [what factors affect your price]. We offer a variety of options to fit your needs and budget. Please visit our [pricing page/contact us] for more information.

Step 4: Filling up Incorporation Form SPICe+ (Simplified Proforma for Integrating Company Electronically Plus)

Unfortunately, we don't currently offer [specific service inquiry]. However, we do offer [alternative service] which might be helpful.

Step 5: Drafting and Filing MOA and AOA

You can reach us by [phone number/email address/contact form link]. We are always happy to answer your questions.

Step 6: Get Certificate of Incorporation

You can reach us by [phone number/email address/contact form link]. We are always happy to answer your questions.

Why ComplyHub for Private Limited Company Registration

Registering a Private Limited Company is the first step to setting up a legitimate business in India. This process involves obtaining DSC and DIN, filing the SPICe+ form, and following various provisions under the Companies Act 2013. ComplyHub simplifies this by guiding you through every step with expert advice. We handle all documentation, compliance requirements, and government formalities to ensure a smooth registration process. Post-registration, we assist with PAN, TAN, GST registration, and annual filing, ensuring ongoing compliance. ComplyHub is your reliable partner for an efficient and accurate company registration experience.

Ready for Starting your Journey ?

Contact us and we will get to you super soon !

Frequently asked questions FAQ`s

How long does it take to complete the process of Private limited company Registration ?

The registration process typically takes 10-15 working days, depending on the completion and submission of all required documents and approvals from the Ministry of Corporate Affairs (MCA).

How Many People are Required to Start a Private Limited Company

To incorporate a private limited company, a minimum of 2 people are required. A private limited company must have a minimum of two Directors and can have upto a maximum of fifteen Directors. A minimum of two shareholders and a maximum of upto 200 shareholders are allowed.

Is it mandatory to have a company secretary for a Private Limited Company?

It is not mandatory for small Private Limited Companies with a turnover of less than Rs. 2 crores. However, it becomes mandatory as per the Companies Act for larger companies.

How is the shareholding structure determined in a Private Limited Company?

The shareholding structure is determined based on the capital contribution by each shareholder. The Articles of Association (AOA) and Memorandum of Association (MOA) detail the shareholding and rights of shareholders.

Can the registered office of a Private Limited Company be changed after incorporation?

Yes, the registered office can be changed within the same city or state with board approval. If moving to a different state, a special resolution and approval from the Regional Director of MCA are required.

How much capital is required to start a Private Limited Company?

There is no minimum capital requirement post the Companies Amendment Act, 2015. However, the company must declare an authorised capital in its MOA.

What happens if the name proposed during registration is rejected?

If the name is rejected, the applicant can submit up to two more names for approval. It's important to conduct a preliminary name search to avoid rejection.

Can foreign nationals or NRIs become directors or shareholders in a Private Limited Company?

Yes, foreign nationals and NRIs can become directors or shareholders, but they need to obtain a valid Director Identification Number (DIN) and Digital Signature Certificate (DSC).

Can a Foreign National Be a Director in an Indian Private Limited Company?

Yes, a foreign national can be a director in an Indian Private Limited Company. However, they must obtain a Director Identification Number (DIN) and a Digital Signature Certificate (DSC). Additionally, at least one of the directors must be an Indian resident. The foreign director’s address proof and identity documents must be notarized and apostilled if they are non-residents. Compliance with Foreign Exchange Management Act (FEMA) regulations is also required when foreign nationals are involved in the company's management.

What Happens If Compliance Is Not Maintained?

Failure to maintain compliance can lead to severe penalties for a Private Limited Company. Non-compliance may result in fines, legal actions, and disqualification of directors. The company could also be marked as inactive or struck off the register by the Registrar of Companies (ROC). Additionally, continuous non-compliance can damage the company’s reputation, making it difficult to secure financing or attract investors. Directors may face personal liability, and the company may incur additional costs to restore its compliance status.