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Private Limited Company

Company Registration in India

If you’re looking to embark on a business venture in India, setting up a private limited company is like putting on a shiny suit of armor. With limited liability for shareholders, it offers a shield of protection against any unforeseen obstacles. But like any suit of armor, there are restrictions on who can wear it – only those who meet the requirements can don this protective gear.

On the other hand, an LLP is like a partnership dance. The partners are the choreographers, setting the direction and rhythm for the business. It’s a collaborative effort where everyone has a say in the company’s management and success.

So, if you’re ready to take on the challenge of starting a business in India, you have two options – put on the armor of a private limited company or join the dance of an LLP.

A Private Limited Company (PLC) is one of the most popular type of company in India that is regulated by the Companies Act, 2013. It needs at least 2 Directors and 2 Shareholders, with one Director being an Indian resident and citizen. To register a PLC in India, you need to have a minimum of:

  • 2 Directors, with one being an Indian resident and citizen
  • 2 Shareholders, who can also be Directors
  • A registered office in India.

Benefits of Pvt Ltd Company Registration

Registering a private limited company has many benefits, such as:

  • Making your business more authentic
  • Protecting you from personal liability and risks
  • Attracting more customers
  • Making it easier to get loans and investments from reliable sources
  • Protecting your company’s assets
  • Providing more stability and potential for growth and expansion.

Checklist for Private Limited Company Registration in India

Creating a private limited company in India is a straightforward process, but you need to ensure that you follow the checklist requirements as defined by the Companies Act, 2013:

  • You need at least two directors, a unique name, an authorised capital of ₹1 lakh, and a registered office (Don’t worry, the registered office can even be your rented home!)
  • By registering your company, you gain authenticity, protection from personal liability, and the potential to attract more customers and investments.

Steps For Company Registration in India

If you’re a startup looking to get ahead, registering your company in India can give you a major advantage over unregistered businesses. However, let’s be real—navigating the complexities of company registration can be about as enjoyable as a root canal. Lucky for you, our team of experts will hold your hand every step of the way, making the process smoother than butter on a hot piece of toast!

Step 1: RUN Name Approval
The initial stage of company registration is called the RUN Name Approval process. This involves reserving a unique name for your company by submitting a request to the Ministry of Corporate Affairs (MCA). You can suggest one or two names along with a brief description of your business goals in the application. If the MCA rejects the name, you can submit one or two more names. The MCA usually approves name requests within 5 business days.

— and ya, worry not! Our professionals would assist you in selecting the perfect name for your company and registering it with the government.

Step 2: Get Directors’ Digital Signature Certificate (DSC)
In India, regular signatures are not accepted by the Ministry of Corporate Affairs (MCA). Hence, it is necessary to use a digital signature certified by an Indian certification authority for all filings with the MCA. Before incorporating the company, the Directors must obtain digital signatures.

We will help the Directors obtain a DSC from a recognized certifying body. They need to submit their identity documents and complete a video KYC process to get the digital signature. If a Director is a foreign national, their provided passport and other documents need to be apostilled by a nearby embassy

Step 3: Submitting the Company Incorporation Application
After obtaining the required digital signatures, the next step is to submit the company incorporation application in SPICe form along with all necessary documents to the MCA. The application must also include the Memorandum of Association (MOA) and Articles of Association (AOA). Upon review and acceptance by the MCA, an incorporation certificate and PAN for the company will be issued. The entire process usually takes less than five working days for approval.

Private Limited Company Compliances

Keeping up with various compliances is important for a registered company in India. After registration, a company must comply with requirements such as:

  • Get your finances right: Appoint a practising, certified, and registered Chartered Accountant (CA) within 30 days of incorporation and file the annual income tax return using form ITR-6 with the Director’s digital signature.
  • Verify your identity annually: Submit DIN KYC to verify the phone number and email address on file with the MCA each year.
  • Deposit subscription and create a bank account: The shareholders must deposit the subscription amount within 180 days of incorporation and create a bank account for the company to receive the business incorporation certificate.
    To obtain a business incorporation certificate, shareholders of a company with a paid-up capital of ₹1 lakh must deposit the same amount in the company’s bank account and furnish the MCA with a copy of the bank statement.
  • Stay compliant: File MCA Annual Filings each financial year, including Forms MGT-7 and AOC-4, and ensure the documents are digitally signed by the Directors and a working professional.
  • Income Tax Filing: Each financial year, companies are mandated to file their income tax returns using ITR-6 form. Income tax filing must be completed by the deadline for each financial year, irrespective of the incorporation date. The company’s income tax return must be digitally signed by a director.

Requirements to Start a Private Limited Company

To become legally registered, a firm must fulfill certain conditions before its incorporation. These are the conditions that must be met:

  1. Directors and Members:
    A minimum of two and a maximum of 200 members are required for a private limited company to be registered. The Companies Act of 2013 mandates this as a legal requirement. The following director requirements must be met:
    • Every director must carry a DIN issued by the MCA
    • One of the directors must be an Indian resident, meaning they must have spent at least 182 days in India during the previous calendar year.

  2. The Business Name:
    Choosing a name for a private limited company is critical. Two factors should be considered:
    • The name should reflect the company’s principal activity.
    • The name should include “Private Limited Company.”

  3. Registered Office Address:
    After the registration process is completed, the business’s permanent registered office address must be submitted to the company registrar. This is where the primary business is conducted and where all company documentation is kept.

  4. Obtaining Additional Documents:
    Every business is required to obtain a DSC to validate the legitimacy of electronically submitted documents. Additionally, credentials from specialists, such as secretaries, chartered accountants, cost accountants, etc., are required for various operations in the business.

Documents Required for Online Company Registration

To register a private limited company in India, providing valid identity and address proof is mandatory. The following documents are accepted by the MCA during the online company registration process:

  • Scanned copy of PAN card or passport (for foreign nationals and NRIs)
  • Scanned copy of voter ID/passport/driving license
  • Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
  • Scanned passport-sized photograph and specimen signature (blank document with signature for directors only)

To register a company in India, it is mandatory to provide proof of a registered office. The following documents are accepted by the MCA for online company registration:

  • Proof of Registered Office
  • Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
  • Scanned copy of notarized rental agreement in English
  • Scanned copy of no-objection certificate from the property owner
  • Scanned copy of sale deed/property deed in English (in case of owned property)

Note that the registered office can be located at a residential address and doesn’t necessarily have to be a commercial space.

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ParticularsPrivate Limited CompanyLLPOne Person Company
Ideal forBusinesses having high turnover and entrepreneur who need external source of funding.

Enterprises with significant revenue and entrepreneurs seeking external funding.
Service oriented business that have low investment needs.

Service-based businesses with minimal capital requirements.
Proprietor looking to limit liability and wants 100% control over the business.

Business owners who want to restrict liability and retain complete control over their enterprise.
Minimum Share CapitalNo minimum requirementNo minimum requirementNo requirement for minimum share capital. If capital exceeds 50 lakhs, OPC gets converted to Pvt. Ltd.

No minimum share capital is required for an OPC, but it will be converted into a Pvt. Ltd. company if the capital exceeds 50 lakhs.
Members Required2 members minimum

Max 200
2 members minimum

No Limit
1 member minimum

Min 1
Directors RequiredMinimum 2Two designated partnersMinimum 1
Statutory AuditCompulsoryNot compulsory unless partner’s contribution is above 25 lakhs or annual turnover exceeds 40 lakhs It is optional unless the partner’s contribution is over 25 lakhs or the annual turnover exceeds 40 lakhs.Compulsory
Liability of Partners/DirectorsLimited
Foreign Direct InvestmentEligible via automatic routeNot eligible for FDI
Income Tax Rate25%30%25%
Statutory ComplianceMoreLessModerate
GST RegistrationIn case of service if turnover exceeds 20 lacsSame

Private Limited Company FAQ's

To register a private limited company in India, the Registrar of Companies (ROC) has some naming guidelines that should be followed. Although some guidelines are subjective, adhering closely to the rules increases the chances of approval. Before applying, make sure the desired name is available.

If all your documents are in order, the company setup process in India can be completed within 15 days, depending on the registrar’s workload.

The process is entirely online, so physical presence is not required. Instead, you would need to submit scanned copies of all necessary documents and forms.

Directors must provide ID and address proof, PAN card (for Indians) and passport (for foreigners). Owner of registered office must submit a no-objection certificate.

As long as you fulfill the annual compliances, your private limited company will remain in existence. Failure to meet these requirements will result in dormancy and eventual removal from the register.

A private limited company must appoint an auditor within 30 days of incorporation, regardless of its revenue. Non-compliance can result in penalties and blacklisting of directors.

These documents outline your organization’s rules, vision, and mission, as well as defining the business and outlining the roles and responsibilities of shareholders and directors.

Two directors are mandatory for a private limited company, with a maximum of 200 members. In case of a sole owner, one person company registration is possible.

A salaried person is eligible to become a director in a private limited, LLP, or OPC private limited company, subject to the terms of their employment agreement. Employers may permit their employees to serve as directors in other companies.

LLP cannot be converted into a private limited company as there are no provisions in the Limited Liability Partnership Act, 2008 or the Companies Act, 2013 for such conversion. However, a new private limited company with the same name can be registered for business expansion, provided that the LLP issues a no-objection certificate.

We can register a private limited company within 14-15 days, subject to timely document submission and government approvals. Choose a unique name and have all necessary documents ready to speed up the process.

The company can be registered using the owner’s residential address, provided that a copy of the utility bill is submitted as proof.

Definitely! It is never a stale idea to register a family member as a partner initially, as the director’s shares can be transferred or changed at a later stage.

A NRI or foreign national can be a director and hold a controlling stake in a private limited company, provided they obtain a DIN from the Indian RoC. However, the board of directors must have at least one Indian resident.

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