Introduction
A Private Limited Company is the most common type of legal entity which is preferred by millions of Indian Entrepreneurs and popular startups like Flipkart, Phone pay and swiggy, etc. A private Limited Company can be registered online and offline. It can be registered online within 10 days at a very affordable Price.
Private Limited Company
In India, a Private Limited Company is one of the most common types of legal entity which is governed by the Companies Act, 2013. It requires a minimum of 2 Directors and 2 shareholders with one of the Directors being an Indian Resident and Indian Citizen.
To register a company in India
For Company registration minimum requirements are the following:
2 Directors – In these 2 directors one Person should be an Indian National and an Indian Resident
2 Shareholders – Shareholders can be a director of the company.
Registered Office in India
In India, 100% Foreign Direct Ownership is permitted in most sectors. There is no restriction on the foreign shareholding of a private limited company.
Required Documents of Private Limited Company Registration
The proposed directors of a private limited company must present the following documents as proof of the identification for the registration of the company:
PAN card
Passport
Driver’s License or Aadhar Card of the Companies Director.
Bank Statement / Electricity Bill / Phone Bill director must produce any one document which will be submitted as residence proof. It must have been generated within the last two months.
If one of the company's shareholders is a company based in India or abroad, some documents must be submitted which are mentioned below:
Board resolution authorizing investment in the company
Incorporation Certificate of the Company
Address proof of the company
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Registration Process of the company
In India, The following steps are involved for the registration of a company:
1. RUN Name Approval: -
Firstly, to submit an application for company name approval to the Ministry of Corporate Affairs for the reserve of the company name. One or two names can be submitted with the business objectives. If the name approval is rejected then another 1 or 2 names can be submitted. Normally MCA approves the application for the name approval in less than 5 working days.
2. Digital Signature for Directors: -
In India, MCA does not allow wet signatures. All signatures for filings with the MCA must be completed with a digital signature which is issued by the Certification Authority in India. It means digital signatures are mandatorily required for the Directors before the incorporation of the company.
After obtaining the digital signature, directors will submit a copy of their Id proof and complete a KYC video process. If the Director is a foreigner then the passport and other documents submitted must be an apostle by the local embassy.
3. Incorporation Application Submission: -
Once the digital signatures are obtained then the incorporation application can be filed in SPICE Form to the MCA with all relevant attachments. Along with the incorporation application, filed the Memorandum of Association (MOA) and Articles of Association (AOA) of the company. The incorporation Certificate is granted along with the PAN of the company when the MCA finds the incorporation application to be completed and acceptable. The MCA accepts all the incorporation applications in less than 5 working days.
Private Limited Company Compliances
In India, once a company is registered then various compliances must be maintained from time to time for avoiding penalties and prosecution. After the Company registration, some compliance is required to complete the process which is given below:-
1. Auditor Appointment:
In India, all registered companies must appoint a practicing and licensed CA registered with the ICAI within 30 days of incorporation.
2. Director DIN KYC:
All persons who hold the Director Identification Number which is allocated during the incorporation process must be completed DIN KYC each year to validate the phone and email address on the record with MCA.
3. Commencement of Business:
The Company must open a Bank Current Account and the shareholders must deposit the subscription amount which is mentioned in the MOA of the company within 180 days of incorporation. It means if the incorporated company paid up capital of Rs. 1Lakh than the shareholders must deposit Rs.1Lakh in the company’s bank account and also file the bank statement with the MCA for obtaining the commencement of business certificate.
4. MCA Annual Filings:
In India, all registered companies must file a copy of the financial statements with the MCA each financial year. If the company is incorporated between January to march after that the company can choose to file the first MCA annual returns as a part of the next financial year. Form MGT-7 and FORM AOC-4 consist of the annual return with MCA. These forms must be signed digitally by the Directors and practicing professionals.
5. Income Tax Filing:
All companies must file an ITR and it used Form ITR-6 each financial year. It must be filed before the due date-irrespective of the incorporation date. The ITR of a company must be signed digitally by one Director of the Company.
Advantages of Private Limited Company Registration
The major advantages of incorporating a private limited company in India versus other entity types were given following:-
1. Separate Legal Entity: -
A company is a legal entity, a juristic person and it’s a separate legal entity. So that company has many legal rights like acquiring property, incurring debts and hiring people, etc. But the company’s members are not personally liable for the company’s liability.
2. Limited Liability: -
A private limited company is a separate legal entity with the provisions of limited liability. Hence the shareholders do not liable for the losses of the company for an amount more than what was invested by them as the share capital into the company.
3. Uninterrupted Existence: -
A company has perpetual succession which means it will continue to exist until do not dissolve legally. It is unaffected by the death of any member of the company or other departure of its members and it continues to exist anyhow the membership was changed because the company is a separate legal entity.
4. Fund Raising: -
A private limited company has multiple options for the telethon. A private company can raise funds from shareholders, investors, private equity funds, and other financial institutions. A private limited company can raise debt and equity funds from investors.
Conclusion
It concluded that a Private Limited Company is one of the most common types of legal entity which is governed by the Companies Act, 2013. It requires a minimum of 2 Directors and 2 shareholders with one of the Directors being an Indian Resident and Indian Citizen. A private Limited Company can be registered online and offline. It can be registered online within 10 days at a very affordable Price.
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