What is private limited company?
A Private Limited Company is a company that offers limited liability, or legal protection for its shareholders but that places certain restrictions on its ownership. A company is considered as a separate legal entity having perpetual succession, with liability of shareholders limited to the capital being contributed by them. Hence, a shareholder is not personally liable for the debts of the company. It provides credibility to business in the eyes of financial institutions, suppliers and potential clients. As it makes easier for companies to get loans at favorable terms from banks or convincing potential clients while entering into deals.
What are eligibility for private limited company registration?
- Minimum Two People: Minimum two people are required to start the private limited company in India. The same two people can become shareholder and director of the company simultaneously. However, maximum 200 people can become shareholder in the private limited company.
- No Minimum Capital: Capital of the business is depending on the need of the business and statutory no minimum capital is required to start the private limited company. However, Minimum authorized and subscribed share capital required for private company is Rupees one lakh.
- One Resident Director: Among director, one person must be resident Indian.
- Unique Name: The name of the private limited company should be unique and should not be similar to the any existing company name or trademark.
What are advantage of private limited company registration?
- Limited Liability of shareholder: Liability of shareholders of the private limited company are limited only up to the shares subscribed by them and should not be personally liable for the debts of the company in case company are unable to pay its liabilities.
- Separate Legal Entity: Company legal entity are separate than its shareholders/promoters.
- Perpetual Existence: Company existence will go for ever and its existence will not be effected by the death of shareholders, directors or transfer of shares to others.
- Capacity to Sue and to be Sued: Company can take legal action against another and also other person can take legal action against company separate from directors, shareholders & promoters.
- Ownership of property: Private limited company can sale, purchase and own the property like individual.
- Borrowing Recognition: Companies are more recognized in terms of financial assistance/borrowing from banks and financial institution rather organization which are not company form of organization.
What are documents required for private limited company registration?
- PAN Card for Indian Nationals (Mandatory)
- Passport for Foreign Nationals (Mandatory)
- Proof of nationality for Foreign Nationals
- Proof of Identity (Voter ID/Passport/Driving License) (any one)
- Resolution of the board of company / LLP for authorization of director/partner
- 2 Passport size photos.
- Bank statement/Electricity/Telephone/Mobile bill) (not older than two months) (any one)
Proof of Registered office
- Conveyance/ Lease deed/Rent Agreement etc. along with rent receipts (any one)
- Copy of the utility bills (Telephone/Gas/Electricity bill) (not older than two months) (any one)
- NOC from Landlord
- DSC form (physically signed)
Note: All the Documents in case of Foreign Director should be additionally complied as follows:
- Notarized (if residing in commonwealth countries)
- Notarized & Apostiled (if residing in country which is signatory to Hague convention)
- Notarized & Consularised (If not covered in above categories)
What are procedure for private limited company registration?
- Name approval of the company: The first step in incorporation is to reserve/approve the name of company. The proposed name selected should do not contain any word which is prohibited under Companies Act, 2013. An approved name is valid for a period of 20 days from the date of approval, for a new company. It is permitted to apply for two proposed names and one Resubmission (RSUB) while Reserving Unique Names for companies through the RUN web service.
- Digital Signature Certificate (DSC) of Director: The application for private limited company is filed online and it is mandatorily required to be signed by the director and shareholder of the company. So DSC is required to be taken by those directors and shareholder of the company, , who is required to sign the e-form for registration of the company. Photo, ID and Address proof is required to along with DSC application form for issuance of DSC.
- Director Identification Number: It is a unique identification number to the director issued by Registrar of the companies (ROC) for becoming a director in India. An application is filed along with ID and address proof duly attested by CS/CMA/CA.
- Approval of other authorities: The Registrar of Companies may require the applicant to furnish the approval or concurrence of any department,regulatory body, appropriate authority, or Ministry of the Central or State Government(s) in relation to the work to be done.
- Document submission: Application for registration/incorporation of private limited company is made to Registrar of Companies (ROC) along Memorandum and Article of Associations, declaration, affidavits etc.. Minimum two persons are required for Incorporation of private limited company.
- Registration Certificate: ROC then scrutinizes the incorporation form and documents, if ROC finds the documents are in order, issues Certificate of Incorporation of private limited company. Certificate of Incorporation are conclusive evidence of registration of company. After receiving the certificate of Incorporation the private limited company is set to start its function.
- PAN & TAN: Permanent Account Number (PAN) & Tax Deduction Account Number (TAN) are allotted by the Income tax Department to the company. These identification numbers are essential for smooth operation of the company. These are applied along with company incorporation documents. These are mentioned on Certificate of Incorporation.
- Opening of Bank Account: On submission of Certificate of Incorporation & other essential documents, bank open a current account in name of company, required for smooth running of the company.