Registering your company protects you by shielding the business from personal liability, generating more capital contribution, attracting more customers, providing greater stability, and enhancing the company's potential. There are various business forms to which one can register. People can register their business as private limited, sole proprietorship, partnership, limited liability partnership, one-person company, etc and each has its own guidelines.
A Private Limited Company in India lies somewhere between a partnership firm and a widely owned public company. It can be registered with a minimum of two people. A person can be both a director and shareholder in a Private Limited Company. Private Limited Companies are regulated under the company's Act 2013 and the Companies Incorporation Rules, 2014. It is a prevalent and popular business option in India as it gives separate legal identity, Limited liability, more transparency, and international recognition to the business. The ownership of the company is divided among various shareholders (Max up to 50) as per their capital investment into the business as share capital. The liability of the members of a Private Limited Company is limited to the number of shares held by them.
Step 1: The first step is to obtain DSC. DSC or Digital Signature Certificate is very important for the company registration and should be acquired by only those agencies which are appointed by the controller of certification agencies (CCA). In case you already have a DSC then you don’t need to apply for another one for company registration but you must ensure it must be under the validity period.
Step 2: Apply for the DINof the proposed Director in the SPICe Form along with the name and the address proof of the director.
Step 3: Submit an application for name availability. It should be kept in mind that the name should not match any existing companies or trademarks in India. A preferred format as per the MCA to name the company is - Unique Component + Descriptive name + Private Limited. In this, the unique component needs to be creative, imaginative, and distinct in nature, at the same time complying with guidelines. The descriptive name defines your business in brief and gives perks to your work/business.
Step 4: Submission of MoA and AoA to register a private limited company.
Step 5: Apply for the PAN and TAN of the company documents submitted to the ROC.
Step 6: RoC issues a certificate of incorporation with a PAN and TAN. After that, the Company can start its business after getting the certificate of incorporation which can be incorporated within 15 working days.
PAN card acts as a primary ID proof. All the partners are required to provide their valid PAN details while applying.
(in case of Foreign Nationals/ NRIs) –
Foreign nationals and NRIs, have to submit their passport compulsorily along with these documents. Passport has to be notarized or apostilled by the relevant authorities in the country of such foreign nationals and NRI, else Indian Embassy situated in that country can also sign the documents.
A translated copy must be submitted after gaining the right authorization or notarization if in case these documents are in any language other than English.
Address proof of Directors and Shareholder (Out of Latest bank statement, telephone bill, mobile bill, electricity bill or gas bill should be submitted as residence proof. Ensure that statement shouldn’t be more than 2 months old)
(in case of Foreign Nationals/ NRIs) –
The Foreign Nationals or NRIs have to submit a proof of address also which will be a driving license, bank statement, residence card, or any government-issued identity proof containing the address.
All partners must provide copies of their passport-sized photographs. While there is no strict specification regarding the size and resolution of the image, it is preferred that the photograph have a white background.
Proof must be provided to ensure the registered office address of the Pvt. Ltd company. Any utility service like telephone, gas, electricity, etc. depicting the address of the premises in the name of the owner or document, which must not be older than two months at the least can act as Proof of evidence.
If the registered office is rented, the rent agreement and a NOC from the landlord have to be submitted. This acts as an authorization from the Landlord to use the premises by the company as its registered office.
A Private limited company is an independent legal entity that is separate from its promoter, shareholders, or members.
Many times startups need to borrow money and take things on credit. In case of normal Partnerships, Partners personal savings and property would be at risk in case the business is not able to repay its loans. In a private limited company, only investment in the business is lost, personal assets of the directors are safe.
Shares of a company limited by shares are transferable by a shareholder to any other person. Filing and signing a share transfer form and handing over the buyer of the shares along with a share certificate can easily transfer shares.
The life of a Private Ltd Company is independent of the life of its founders or its members. A typical purpose of registration of a Private Limited company is continuity of business till eternity. Irrespective of the life of people incorporating a private limited company, it continues to operate through the generations. Even if the members, for that matter even all members, become bankrupt/insolvent, the company remains unaffected.
A private company can borrow money in the form of Exempted Deposits, Issue of Debentures, or Issue of Deposits. Even the banks and financial institutions prefer to render large financial assistance to a private Ltd company compared to partnership firms or proprietary concerns.
A Private Limited company has a wide range of options to raise funds through bank loans, Angel Investors, and Venture Capitalists, in comparison to LLPs and OPCs.
Since, Private Ltd company is a popular and well-known business structure, corporate customers, vendors, and government agencies prefer to deal with them instead of proprietorship or normal partnerships.
Another advantage of registering as a Private Ltd Company in a systematic and planned manner is that it becomes possible to dissolve the same company in a hassle-free manner if and when the need arises.
The incorporation of a private limited company is a little bit of a technical task & due care should be taken while incorporating a private limited company. Although the Government of India has taken various steps to simplify the incorporation process, a non-professional person himself cannot incorporate a private limited company, he/she has to appoint an expert to complete this task. If you want to go for Private Ltd company registration, then you can completely rely on SuperCA. We are a young & energetic qualified team comprising of CAs, CSs, MBAs, and Lawyers for providing you with a one-stop solution with technological expertise and the knowledge of our professionally experienced personnel.