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Private Limited Company

A Private Limited Company (Pvt Ltd) is a preferred business structure in India, offering benefits like limited liability and a separate legal entity for its shareholders and directors. Over 90% of registered companies in India are Private Limited Companies, underscoring their popularity among entrepreneurs.

What is a Private Limited Company?

A Private Limited Company is a business entity privately held by a small group of people, incorporated under the Ministry of Corporate Affairs. It requires a minimum of 2 members and can have up to 200 members. Shareholders are the owners, while directors are the key managerial personnel. This structure offers limited liability protection, meaning personal assets of shareholders are safeguarded against company liabilities.

 

Benefits of Private Limited Company Registration:

  1. Improved Credibility:

    Being registered as a corporate entity enhances the company's credibility in the market.

  2. Attract Funding:

    Facilitates raising capital through equity and debt, providing an optimal capital structure.

  3. Foreign Investment:

    Allows Foreign Direct Investment (FDI) under the automatic route, enabling easier access to international funding.

  4. Separate Legal Entity:

    The company exists independently of its owners, allowing ownership of assets and incurring liabilities in its own name.

  5. Limited Liability:

    Protects personal assets of shareholders; their liability is limited to their shareholding.

  6. Easy Transferability:

    Ownership can be transferred by transferring shares, facilitating business continuity.

  7. Perpetual Existence:

    The company's existence is not affected by changes in ownership or management, ensuring stability.

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Minimum Requirements for Incorporation

  1. Directors: At least 2 directors; at least one must be a resident of India.
  2. Unique Name: The company must have a unique name that is not identical or similar to any existing company or trademark.
  3. Registered Office Address: A physical address in India where the company's registered office will be situated.

Process of Private Limited Company Registration

  1. Digital Signature Certificate (DSC): Obtain DSCs for proposed directors to sign electronic documents.

  2. Director Identification Number (DIN): Apply for DIN for all proposed directors.

  3. Name Approval: Submit up to two proposed names to the Ministry of Corporate Affairs (MCA) for approval.

  4. Incorporation Documents: Prepare and file the Memorandum of Association (MoA) and Articles of Association (AoA) along with other required documents.

  5. Filing with MCA: Submit incorporation forms online through the MCA portal.

  6. Certificate of Incorporation: Upon verification, the Registrar of Companies (RoC) issues the Certificate of Incorporation, along with PAN and TAN.

Documents Required for Private Limited Company Registration

For Directors and Shareholders:

  1. For Registered Office:

    • PAN Card

    • Aadhaar Card

    • Passport-sized photographs

    • Address proof (e.g., bank statement, utility bill not older than two months)

  1. For Registered Office:

    • Proof of address (e.g., electricity bill)

    • No Objection Certificate (NOC) from the property owner

    • Rent agreement (if applicable)

Documents Issued Post Incorporation

  1. Certificate of Incorporation

  2. Permanent Account Number (PAN) of the company

  3. Tax Deduction Account Number (TAN)

  4. Memorandum of Association (MoA)

  5. Articles of Association (AoA)

  6. Director Identification Number (DIN)

  7. Digital Signature Certificate (DSC)

  8. Company Master Data

Private Limited Company Registration Fees

The total cost of registering a Private Limited Company in India starts from ₹8,499, which includes government fees and professional charges. The exact amount may vary based on factors like authorized capital and state-specific fees.

Time Required for Registration

On average, the registration process takes about 7-10 working days, subject to document verification and processing by the MCA.

Frequently Asked Questions

  1. How can I register a Private Limited Company?

    • You can register by following the steps outlined above or by engaging a professional service provider to handle the process on your behalf.

  2. Is GST mandatory for Private Limited Companies?

    • GST registration is mandatory if your company's turnover exceeds the threshold limit specified under GST laws or if you are engaged in interstate supply of goods and services.

  3. What is the minimum capital requirement for a Private Limited Company?

    • There is no minimum capital requirement; you can start with any amount of capital as per your business needs.

  4. Which is better, LLP or Pvt Ltd Company?

    • The choice depends on your business objectives. Private Limited Companies are preferred for businesses planning to raise equity funds, while LLPs are suitable for professional services firms.

  5. Can we convert an LLP to a Private Limited Company?

    • Yes, an LLP can be converted into a Private Limited Company by following the procedures laid down by the MCA.

For personalized assistance and to ensure a seamless registration process, consider consulting with professionals who specialize in company incorporation services

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