Whenever a company is required by law to register, it must be registered in accordance with the provisions of the Company Law 2013 and the relevant amendments to its effect. When it comes to company registration in India, all the laws are defined by that law, that law requires at least 2 people in the case of a private company and also prescribes certain requirements in the case of a public company.
There should be at least 7 people, a new concept has also emerged in the years known as single person company, and one person company is owned and operated by single person. It should be accompanied by relevant copies of documents such as Aadhar card, PAN card, bank account statement, electricity bill, copies of the sale deed, lease deed, lease agreement, etc. These documents need time and again.
Private limited company
Private Limited Companies are companies in which the people are privately owned. These are preferred as a general business entity in India. Shareholders can manage the business themselves or hire directors to manage the company on their behalf.
Benefits of Private Limited Company registration
When the business grows the fund is growing and that is what implied. Hence business has to borrow funds. The private limited the extent of the liability is limited to their amount which has been invested into the business. Hence it is not liable to their personal assets. This means they are not personally liable to pay the debts.
Private limited companies have easy access to equity funds through venture capitalists and angel investors because they have no opportunity to invest in other structures.
A private limited company can borrow from banks, debentures and convertible debentures.
They have more credibility as they need to inform the structure, directors, members, the Ministry of Article and Memorandum of Association and the Ministry of Corporate Affairs about the necessary changes. Such information is available on the Internet in the public domain, making the business entity more reliable compared to partnerships and owners.
Private business entities can be partially or completely sold or transferred to another person or entity without any interruption to the current business.
More capital can be raised as there is no limit to the number of shareholders.
The minimum number of shareholders to start a company is only 2. The maximum number of shareholders allowed is 50 so more capital can be raised.
Continuity of existence:
Business is not affected by the status of the owner. It exists.
The brand value of the company increases as people become more aware of the company.
Private limited companies receive tax benefits. These companies pay corporation tax on their taxable profits and are exempt from high personal income tax rates. This opens the door to redemption allowances against higher tax deductible expenses and profits.
Management of shareholder affairs:
A) Transfer of shares: Shares in any form of the Company are usually transferred free of cost. However, articles in a private company can also set some limits and the manner in which they can be transferred.
B) Meetings General Meetings: The PLC must give 21 clear days’ notice to hold any general meeting, unless all shareholders agree to a minimum notice. However, in the case of a private company the articles can determine the duration of the notice, which is required to assemble the general notice, as well as the consent of the shareholders to the meeting at the short notice.
Steps to incorporate the private limited company
Step 1: Obtain Director Identification Number (DIN), for the proposed proprietors of the company.
Step 2: Applying for the name. The name should not be similar to any registered trademark. After submitting the form, the registrar will review for the name. Usually it will take 5 working days for completing the process.
Step 3: Drafting MOA and AOA
MOA is the Memorandum of Association. It contains the important provision of company’s constitution. AOA is Article of Association. This contains the rules and the regulations which are related to the internal management.
Step 4: Filing for the incorporation of the private limited company
Upon approval of the name, the promoters must submit the application, the prescribed fees and the following documents to the Registrar.
Declaration from the Directors
Affidavits of Directors
A statement said it had compiled the requirements of the law and the rules framed there. The right to appear before a Supreme Court Advocate or a lawyer or a barrister or a court on this statement or the High Court or Chartered Accountant shall be engaged in the establishment of an organization in India all the time, or by the person mentioned in the articles as Company Director, Manager or Secretary. In addition to the above documents, the company must provide information to its registered office within 15 days of registration or at the time of filing the merger documents.
Step 5: Certification of Company registration
Upon filing of the above documents and payment of the required fees, a company incorporation certificate will be issued by the Registrar of Companies. After the incorporation, the firm becomes a legal entity separate from its entities.
Documents required for the private company limited registration
Documents for the individual stakeholders
- PAN card- self attested
- Passport size photo
- Aadhar card
- ID proof
- Voter ID, passport
- Address proof:
- Electricity bill, phone bill or bank statement
Documents required for corporate companies as stakeholders
- PAN card of the company
- Letter of consent or Board resolution
- Address proof
- Electricity or phone bill
Documents for Foreign nationals
- Address proof, residence card
One Person company
One Person Company is a new concept introduced by the Ministry of Corporate Affairs that allows an entrepreneur to manage a corporate entity with limited liability protection. OPC registration makes the entrepreneur a separate legal entity that separates from the company and has limited liability. And, the company has its own assets and liabilities, the promoter and their property are segregated and are not personally responsible for repaying the company’s debts.
What are the type of companies that can be registered?
- Private limited company
- Public limited company
- Limited liability Partnership
- One Person Company
- Non-Banking finance company
- Nidhi Company
- Sole proprietorship
- Partnership firm
- Section 8 Company
- Trust registration
- Society registration
Can I register Private limited company on home address?
Can I register family members as directors for a private limited company?
Yes. You can. Later on you may change and transfer the shares
Can NRI or Foreign National become director in Pvt.Ltd Company?
Yes, NRI or Foreign national can become director of private limited company
How many days required to register private limited company?
Minimum 10-15 days are required to register. Also it may depend upon document and speed of approvals.
How much does it cost?
The cost depends upon the share capital, number of directors, filing fees of professional like advocates, CS and CA.Get a Quote