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Overview of Private
Overview of Private
limited company
experience
Overview of Private limited company
Eligibility criteria
Minimum number of directors: A private limited company must have at least two directors.
Minimum number of shareholders:
A private limited company must have at least two shareholders.
Age of directors:
A private limited company must have at least two shareholders.
Nationality of directors:
The directors must be Indian citizens.
Resident directors:
At least one of the directors must be a resident of India, meaning they have lived in India for at least 182 days in the previous financial year.
Paid-up capital:
There is no minimum paid-up capital requirement for a private limited company, but the company must have enough capital to carry out its business operations.
Benefits Of Registering a Private Limited Company in India
Limited liability protection: The owners of a private limited company have limited liability for the company's debts, meaning their personal assets are protected in the event of the company's failure.
Separate legal identity
A private limited company has a separate legal identity from its owners, which makes it easier to raise capital, enter into contracts, and own property.
Potential tax benefits
A private limited company may be eligible for certain tax benefits, such as lower tax rates on profits and the ability to claim tax deductions for business expenses.
Transferability of ownership
The ownership of a private limited company can be easily transferred by selling shares, which makes it easier to raise capital and bring in new investors.
Professional reputation
Having a private limited company can enhance the professional reputation of the business, which can make it easier to secure partnerships and attract customers.
Continuity of business
The death or departure of a shareholder or director does not affect the continuity of the business in a private limited company.
Document Requirements for Incorporating a Company in India
Minimum number of directors and Shareholder: A company must have a minimum of two directors and two Shareholder.
Name availability
The proposed name of the company must be unique and not infringe on any trademarks.
Registered office
The company must have a registered office within India.
Director Identification Number (DIN)
Each director must have a DIN, which is a unique identification number issued by the Ministry of Corporate Affairs.
Digital Signature Certificate (DSC)
The company and its directors must have a DSC, which is a secure electronic signature required for electronic filing of documents with the Ministry of Corporate Affairs.
Memorandum of Association (MOA) and Articles of Association (AOA)
The MOA and AOA must be filed with the Ministry of Corporate Affairs, outlining the structure, objectives, and regulations of the company.
Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN)
The company must apply for a PAN and TAN.
Essential Forms to be filed for Incorporating a Company in India
The following are the essential forms that must be filed for incorporating a company in India
DIR-2
This form is used to apply for a Director Identification Number (DIN) for each director of the company.
SPICe (INC-32)
This is a combined form for registering a new company and is used to incorporate a company, obtain DINs for directors, and register for PAN and TAN.
INC-7
This form is used to apply for the availability of the proposed company name.
INC-22
This form is used to inform the Registrar of Companies (ROC) about the registered office of the company.
MOA and AOA
These forms outline the structure, objectives, and regulations of the company and must be filed with the ROC.
INC-33
This form is used to file the MOA and AOA with the ROC.
INC-34
This form is used to file the certificate of incorporation, which is issued by the ROC after the company has been successfully registered. Procedure for Incorporating a Company in India
Step 1
Obtain Director Identification Numbers (DINs) for the directors of the company by filing the DIR-2 form with the Ministry of Corporate Affairs.
Step 2
Check the availability of the proposed name of the company by filing the INC-7 form with the Ministry of Corporate Affairs.
Step 3
Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) and file the INC-33 form with the Ministry of Corporate Affairs to register the MOA and AOA.
Step 4
File the SPICe (INC-32) form with the Ministry of Corporate Affairs to incorporate the company and obtain PAN and TAN.
Step 5
File the INC-22 form with the Ministry of Corporate Affairs to inform them about the registered office of the company.
Step 6
Obtain the certificate of incorporation by filing the INC-34 form with the Ministry of Corporate Affairs.
Step 7
Register for Goods and Services Tax (GST) and other applicable taxes, if required.
PSR Compliance Assistance
The process of registering a private company involves adhering to many requirements, preparing documents, and complying with pre-incorporation and post-incorporation compliances. Moreover, complying with specific MCA mandates is imperative to avoid incurring hefty penalties and late fees. This process can seem daunting and confusing without professional assistance. PSR Team provides expert service in the online registration process of one’s company on the MCA website. Our team of experts will assist you every step of the way in your journey to get your company registered.
Frequently Asked Questions(FAQ's)
Q: What is a private limited company?
An organisation structure known as a private limited company places the owners' responsibility restrictions on the amount of capital they have committed It is registered under the Companies Act, 2013.
Q: How many members are required to form a private limited company?
A private limited corporation must have at least two members in order to be formed, and it can have up to 200.
Q: What is the minimum capital requirement to start a private limited company?
There is no minimum capital requirement to start a private limited company. It can be registered with a nominal share capital of as low as Rs. 1.
Q: What are the documents required for private limited company registration?
The documents required for private limited company registration include PAN card of directors and shareholders, Aadhaar card or Voter ID of directors and shareholders, passport size photographs, address proof of registered office, and MOA and AOA.
Q: What is MOA and AOA?
Memorandum of Association, or MOA, describes the business's goals and scope of operations. AOA stands for Articles of Association, which defines the company's internal regulations and management structure.
Q: How long does it take to register a private limited company?
The registration process of a private limited company usually takes around 10-15 days, subject to government processing time and document verification.
Q: Can a foreign national or NRI become a director in a private limited company?
Yes, a foreign national or NRI can become a director in a private limited company after obtaining a Director Identification Number (DIN) and fulfilling the other requirements.
Q: What are the tax implications of a private limited company?
A private limited company is liable to pay income tax on its profits at the applicable rate. Taxes must be paid by the company's shareholders on the dividends they receive from the business.
Q: What is the annual compliance requirement for a private limited company?
According to the Companies Act of 2013, a private limited company must submit several yearly filing requirements, including annual returns, financial statements, and income tax returns.