Private Limited company

Private Limited (PVT LTD) Company Registration in India

Registering a private limited company in India is governed by the Companies Act, 2013, and regulated by the Ministry of Corporate Affairs (MCA). The registration process involves submitting the SPICe+ (Simplified Proforma for Incorporating Company Electronically) form to the Registrar of Companies (RoC), along with obtaining a Digital Signature Certificate (DSC) and Director Identification Number (DIN) for each director.

Once the RoC reviews and approves the documents, the company receives a Certificate of Incorporation, officially establishing it as a legal entity. After incorporation, companies must fulfill additional compliance requirements, such as registering for GST (Goods and Services Tax) and adhering to annual filing and audit obligations. Maintaining accurate financial records and preparing timely audit reports are also essential post-registration responsibilities.

Registering as a private limited company offers several advantages, such as limited liability protection for shareholders and potential tax benefits. However, the process also presents challenges, such as potential name rejections, director disqualifications, and ongoing compliance obligations. With expert assistance, your company can navigate these challenges smoothly, ensuring compliance and avoiding delays or rejections in the registration process.

What is a Private Limited Company?

A private limited company is a corporation that can be incorporated with minimum capital as minimum as 10,000 rupees and can be started only with 2 members/Shareholders & With 2 Directors. As per Section 2(68) of the Companies Act, 2013, a private limited company is a company that:

• Limit the shares' transferability 

• Limits the maximum number of members to 200 & does not make any offer to the public of its securities for subscription.

Characteristics of a Private Limited Company

• No Minimum Money Needed: You don’t have to start with a certain amount of money to create a private limited company. This makes it easier for new business owners.
  
  

• Number of Members: A private limited company can have at least 2 members but no more than 200.
  
  

• Can't Sell Shares Easily: You can’t sell your shares to the public. This keeps control of the company with a small group of people.
  
  

• Name Must Have "Private Limited": The company’s name must include "Private Limited," showing it’s not open to the public.
  
  

• More Flexibility: Private limited companies have fewer rules to follow than public companies, so they can operate more easily.
  
  

• One Director Must Live in India: At least one of the company’s directors must live in India.
  
  

• Limited Risk for Owners: If the company owes money, the most you can lose is what you’ve invested in the company. You won’t lose your personal belongings.
  
  

• Can Get Foreign Investment: Private limited companies can accept money from foreign investors, up to 100%, without needing government approval (unless the business area has special rules).
  
  

• More Trustworthy: Private limited companies are considered more reliable, making it easier to get loans or find investors.
  
  

• Separate from Owners: The company is treated as its own person legally. It can own property, borrow money, and sign contracts without affecting the owners.
  
  

• Owners Are Shareholders: People who own shares in the company are its owners. They buy shares to have a part of the company.
  
  

• Managed by Directors: The company is run by directors, who are chosen by the shareholders. They make big decisions for the company.
  
  

• Enough Money Needed: You don’t need a minimum amount of money to start, but you still need enough money to run the business.
  
  

• Lasts Forever: The company keeps going, even if the owners or members change. It doesn’t end unless the owners decide to shut it down.
  
  

• More Privacy: Private limited companies don’t have to share as much information with the public, so they can keep things private.
  
  

• Directors: A private limited company needs at least 2 directors, but no more than 15.

• No Public List of Members: Unlike public companies, private limited companies don’t have to keep a public list of their members.

These points make private limited companies a good choice for smaller businesses because they are easier to manage and protect the owners.

Compliance Requirements for Private Limited Companies

Private limited companies in India have to comply with annual compliance requirements such as filing of the financial statements and annual returns every year within prescribed time limits with the Registrar of Companies (RoC) under the new Companies Act, 2013.

Event-Based Compliance

Some compliances get initiated as and when an event happens in the company, like a change of management, share capital, or registered office. The biggest necessity is compliance; in order to adhere, timely filings are essential.

Board Meetings

First board meeting has to be done within 30 days of incorporation. The number of board meetings to be held in a year shall not be less than four, & gap between two meetings should not be more than 120 days.

Annual General Meeting (AGM)

A private company is required to hold an AGM each year, with the first AGM held within nine months from the end of the first financial year of the company.

Appointment of Auditor

The auditor shall be appointed within 30 days from the date for incorporation. The appointment has to be ratified by members of the AGM and filed with the RoC using Form ADT-1.

Filing of Financial Statements

AOC-4 for financial statements will be filed with RoC within 30 days from the AGM. XBRL Filing for companies with higher turnover.

KYC Of Director

Each director of every company is required to file form DIR-3 KYC on or before the 30 September in each financial year with the Registrar (ROC) while filing.

Statutory Registers

Minutes of Board Meetings and AGMs , Books of Accounts, and Financial Statements: Companies are to also keep and update their statutory registers. These documents must be kept at the registered office and are open for inspection

Due dates for filing of Returns

Within a time limit, certain returns must be filed. Annual return and deposit are required in MGT-7 with Form DPT-3, respectively

Eligibility and Requirements to Register Private Limited Company in India

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, trueconsultant24 offers a service to check name availability, as this helps in making sure your selected name is legal.

Minimum Requirements for Registration

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 should be resident of India. 

• 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

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

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

Naming Your Private Limited Company

Choosing a name for your private limited company is a crucial step in the registration process. The name should comply with requirements of Companies Act, 2013, and meet the following approval requirements set by the Ministry of Corporate Affairs:

Rules for Selecting a Company Name

• Uniqueness: The name should be exclusive and cannot have an existing company or trademark that is exactly (or substantially similar) to the same.

• Relevance: It should be the nature of business or activities done by company

• Legal Compliance:  The name should be in accordance with MCA guidelines and not contain any banned words/ phrases.

• No Misleading Terms: Misleading terms should not be used.

Importance of Company Name Approval

• Legal Requirement: The final approval by the ROC ensures that your proposed name is not violating the rules and regulations of Company registration.

• Brand Identity: Having a name that is unique and fits your niche can aid in brand recognition by itself.

• Avoids Legal Issues: Appropriate approval prevents possible litigation and the honouring of intellectual property rights.

Steps to Check Name Availability

• Visit MCA Portal: Go to the Ministry of Corporate Affairs (MCA) website and visit the Name Reservation tool on it.

• Trademark Search: Do a search to check if the name is not registered under someone else's trademark by checking in the Trade Mark Registry.

• Verify Via trueconsultant24 : You can conduct a comprehensive company name search along with name availability through trueconsultant24.

• Reserve Unique Name (RUN): Application for name by way of reservation in MCA portal..

Step-by-Step Private Limited Company Registration Process

A Private Limited Company provides limited liability protection to its shareholders, making it a popular business entity choice for entrepreneurs in India. The incorporation process involves submitting necessary documents, including the residential address and Bank Statement of the proposed directors, to complete registration. Companies must also maintain a current account for smooth financial transactions. Here is a detailed process for the same:

Step 1: Procuring a Digital Signature Certificate (DSC)

For filing any signed documents with the Ministry of Corporate Affairs (MCA), it is mandatory to have a Digital Signature Certificate. It guarantees the validity and consistency of each file it sends out. We will assist you in getting the DSC registration done on your behalf. 

Step 2: Get Director Identification Number (DIN) 

A Director Identification Number (DIN) is a unique number allocated to an individual intending on being the director of any entity. By filling out the DIN-1 form from our team, we will apply through the MCA portal.

Step 3: Naming Approval Process

File the RUN (Reserve Unique Name) form in the MCA portal to apply for a company name. The name should adhere to the laws of the Companies Act, 2013 and must not be a similar one with any already existing one.

• Confirm that the name is not already in use by another company.

• Observe name selection guidelines by MCA.

• The name should be directly related to the business.

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

SPICe+ is a single, harmonised online form that allows the incorporation of a company laid down in Rule 38(1) along with various other services. 

Step 5: Drafting and Filing MOA and AOA

Memorandum of Association (MOA)—to describe the purposes and extent with which they will operate. Articles of Association (AOA) denote the internal management and governance system. All the vital clauses in MoA and AoA will be added by our team of True Consultants 24.

Step 6:  Get Certificate of Incorporation

Incorporation certificate is a legal document issued by the Registrar of Companies (ROC) after incorporation of a company. Apply for PAN and TAN at the Income Tax Department. 

Difference Between Private Limited Company and Other Business Structures

This table highlights the key differences between Private Limited Companies and other business structures to help you choose the one that fits your business needs best.

Why trueconsultant24 for Private Limited Company Registration?

Start Your Business with Ease – Register Your Private Limited Company with TrueConsultant24!   
                                                                                                         
Setting up a Private Limited Company in India can be complex, involving various legal formalities such as obtaining DSC and DIN, filing SPICe+ forms, and adhering to the Companies Act, 2013. But don't worry – TrueConsultant24 is here to simplify the process for you! With our expert guidance, we handle everything – from paperwork to compliance. Our team ensures smooth registration, taking care of all documentation and government formalities with precision and accuracy.What’s more? We assist with post-registration services like PAN, TAN, GST registration, and annual filings, ensuring that your company remains compliant year after year.With years of experience and a dedication to your company’s growth, TrueConsultant24 is your trusted partner for hassle-free Private Limited Company registration.Let us handle the legal complexities so you can focus on growing your business! Contact us today for a seamless registration process!