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Private Limited Company

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Quick Steps for a Pvt Ltd Company Registration in India

A private limited company is the most chosen type of company in India and it suits medium and small businesses. Pvt Ltd company registration imposes restrictions on the ownership while providing limited liability protection to the shareholders.

The law considers this company a separate legal entity. It has shareholders who own some part of the company and invest in it, while the directors make decisions. Thus, the roles of the directors and the shareholders are clear here. This company is legally separated from the owners and requires a minimum of two directors and two members.

However, neither the shareholders can publicly trade the shares nor the number of shareholders in the Pvt. Ltd. company can exceed 200. A Private Limited Company in India is registered with the Registrar of Companies (ROC) under the Companies Act, 2013.

7 Steps for the Pvt Ltd Company Registration

The Pvt Ltd Company Registration process is tedious but has been simplified to an extent by the SPICe+ form on the MCA portal. Be ready with the documents required for Pvt Ltd Company registration. You may approach a reliable consultant who can guide you.

Step 1: Obtain a DSC

Class 3 DSC is the most secure and mandatory Digital Signature Certificate (DSC). However, you should be physically present before the certifying authority while applying for it. This certificate is valid for one, two or three years. Similarly, all witnesses of the MoA and AoA should possess it.

Step 2: Obtain a DIN

No matter how many companies a director belongs to, he can have only one Director Identification Number (DIN). A person who wants to be a director of an already existing Private Limited Company India can fill the Form DIR 3. A maximum of three directors can fill the SPICe+ form to get a DIN during the incorporation of the company and more directors can be added later.

Step 3: Obtain a Name Approval

You may reserve a name, that follows the naming guidelines, using the SPICe+ Part A form on the MCA portal. Fill out and submit the form again if the name gets rejected. In Part A, you must provide a full business description, along with the type, division, sub-division and category of your company. If the name gets approved, fill out the Part B form within 20 days.

Step 4: Get Your Company Incorporated

The Part B form helps you incorporate your company. Here, you must fill out your Pvt. Ltd. company’s registered office address, application for PAN and TAN, stamp duty and other required documents. You may also opt for name registration and company incorporation by filling out the Part A and Part B forms together. Filing both forms together again is cheaper if the company name gets rejected on the first attempt.

Step 5: Draft MoA and AoA

Draft a Memorandum of Association (MoA), that describes the objective of establishing the company, and Articles of Association (AoA), that mentions the internal regulations in the Private Limited Company India. Fill the MoA with the INC 33 form and AoA with the INC 34 form. Submit these forms on the MCA portal only after getting them digitally signed by the subscribers.

Step 6: Apply for PAN and TAN

You may apply for the PAN and TAN via the SPICe+ form, and your request will be handled by the Income Tax Department.

Step 7: Track the Certificate of Incorporation

After the successful Private Limited Company registration in India, your company will get a PAN, TAN, Company Identification Number (CIN) and a Certificate of Incorporation (COI).

Documents Required For Pvt Ltd Company Registration

Registered address proof (of the company) such as ownership deed or rental agreement.
Identity proof and address proof of the registered partners.
Copies of utility bills received within 2 months.
MoA and AoA.
A trademark application copy and trademark registration certificate are required if the name of the company is inspired by a registered trademark.
Consent on a stamp paper by those who want to be the shareholders of the Private Limited Company India.
NOC from the landlord if the company stands on a rented property.
Directors simultaneously working for other companies should attach a self-declaration.
DSC and DIN. Directors or subscribers not having a DIN should attach the address proof and identity proof to apply for a DIN.
A passport, passport-size photo, notarised documents and address proof (if the director is a foreign national).

You may proceed to the Pvt Ltd Company Registration if you are ready with these documents.

Are You Tired of the Tedious Pvt Ltd Company Registration? Relax! We Make it Simple for You.

Types of Private Limited Companies

Instead of ‘types of private limited companies,’ there are ways that make a private limited company ‘limited.’

Step 1: Limited by Guarantee

The liability of the members is limited to a fixed amount that they agree to contribute if the company shuts down and you must specify this amount in the company's MOA. Non-profit organisations and social enterprises fall into this category.

Step 2: Limited by Shares

It is the most common type. Here, the liability of the shareholders is limited to the face value of the shares they hold. This means that if the company goes bankrupt, shareholders will only lose the money, and not the assets, they invested in the company.

Step 3: Unlimited Company

Owners’ personal assets cannot be protected in this structure, similar to a sole proprietorship. Due to the high risk involved, unlimited private limited companies are rarely used.

Advantages and Disadvantages of OPC

ADVANTAGES	DISADVANTAGES
As a shareholder, you are only liable to the extent you have contributed.	A rigorous registration process and a requirement of various documents.
The Pvt. Ltd. company is a separate legal entity and has its own debts and assets.	Costly and complex dissolution process of the company.
The company won’t shut down in the absence of any member.	Not suitable for bootstrapped and small companies due to penalties and operating costs.
The Pvt. Ltd. company is eligible for certain tax benefits, deductions and exemptions.	Slower operations due to multiple decision makers.
Fundraising and foreign investments are easier because the company is registered with the ROC and MCA.	No centralised control due to a minimum of 2 directors and shareholders.

Conclusion

The Private Limited Company registration in India requires at least two directors. Moreover, at least one director must be a resident of India, having stayed in India for at least 182 days in the previous calendar year. This process is considered tedious because there are various documents required for Pvt Ltd Company registration and you have to fill various forms. Thus, consult a reliable consultant who can help you with the process.

FAQs

May I Run My Private Limited Company at My Home?

Yes, a Private Limited Company may have a residential address as the company’s registered address according to MCA.

How Many Shareholders and Directors Can a Private Limited Company Have?

A minimum of 2 and a maximum of 200 shareholders are allowed here. One of these two should be an Indian resident. A single person can act as a director and a shareholder.

How Frequently Should the Board Meetings Be Conducted?

There shouldn’t be a gap of more than 120 days between two consecutive board meetings. Once the company is successfully incorporated, the first board meeting should be held within 30 days.

Does a Pvt. Ltd. Company Have an Auditor?

Yes, and the company’s first auditor should be appointed within 30 days of incorporation.

What Are the Reasons for a Delay in Pvt Ltd Company Registration?

Incomplete and erroneous documentation, name approval issues, response time, issues with the MCA server and different departments handling your request behind the scenes cause a delay in the registration process.