What is a Private Limited Company?
The most important stage for any company is planning, incorporating, and establishing itself. A private company is defined under section 2(68) of the Companies Act, 2013. A private company is a company that has a minimum paid-up share capital and certain restrictions are provided in the Articles of Association. The shareholders’ liability is limited to the number of shares held by them. The shares of such a company cannot be freely transferable in the open market.
Documents required for registration of a Private Limited Company:
The Companies Act, 2013 and the Company Incorporation Rules, 2014 govern the registration process of companies in India. The minimum requirements to register a private limited company are two shareholders and two directors. All the documents must be duly scanned. Mandatory documents required to be submitted during registration consist of:
PAN Card
Voter’s ID Card/ Driver’s license
Bank statement
Passport size photograph
Utility bills
Director’s signature of a blank document
The registration process of a Private Limited Company:
A private limited company is a company registered with the Ministry of Corporate Affairs. The registration of a company is done online.
A digital signature of all the directors and shareholders is required since the registration process is online.
After finalizing the name of the company, a name application is filed in Form SPICE-Part A.
The Memorandum of Association and Articles of Association are known as the constitution of the company. These two documents must be properly drafted.
SPICE-Part B contains all details of the company. It needs to be filed along with the necessary documents for registration.
A new form AGILE-Pro form needs to be filed. This contains details about GST etc.
Then SPICE-9 Form needs to be duly filled. This form deals with self-declaration regarding non-conviction in the past. In addition, it ensures that correct information is provided in the registration process.
The Ministry of Corporate Affairs after verifying the submitted documents shall grant the Certificate of Incorporation.
What is the minimum paid-up capital required for a Private Limited Company?
There is no minimum paid-up share capital required to incorporate a private limited company. A company can be incorporated with 0 paid-up capital.
What is the fee for company registration?
The cost of registering a private limited company varies statewide from Rs. 6000 to Rs. 20,000. It depends on the Stamp duty of each State, the number of directors, the number of members, authorized share capital, and professional fees.
What documents are required for GST registration of a Private Limited Company?
The documents required for GST registration of a private limited company are as follows:
PAN Card of the company
Certificate of Incorporation of the company
Copy of Memorandum of Association and Articles of Association
PAN card, photographs, Aadhar card of all the Directors of the company
Bank details of the company
Proof of appointment of authorized signatory
Address proof of principal place of company and additional place of business
What is the process of GST Registration for a Private Limited Company?
GST Registration can be done on the official website of Goods and Services Tax. After registering on the website a Temporary Reference Number would be allotted.
The process of GST registration is as follows:
Login to the GST Online Portal
Fill the Form Part-A
Portal will verify your details via mail or OTP
Upload the necessary documents
Fill Part B using the received number
An Application Reference Number will be given
The GST officer will verify the documents. Your application would be accepted or rejected within 7 working days.
If any further proof is asked, one must provide it.
After the GST Officer approves your application, a GSTN number will be allotted to your company.
Advantages of a Private Limited Company
The advantages of a private limited company are as follows:
1. Separate Legal Identity:
A private limited company is a legal entity incorporated under the law. The members of the company have no liability towards the company’s debts as both of them have a separate existence.
2. Limited Liability:
A shareholder in a private limited company has limited liability up to the number of shares held by him.
3. Perpetual succession:
Since a company has a separate legal existence of its own. It is separate from the members of the company. Members may come and leave but the company goes on forever.
4. No minimum share capital required:
A company need not have a minimum share capital to incorporate itself. A company can be incorporated with 0 paid-up share capital.
Disadvantages of a Private Limited Company
The disadvantages of a private limited company are as follows:
1. Restriction on transferability of shares:
In a private limited company, a shareholder cannot transfer shares to the general public unless prior approval is taken by the Board of Directors. If an existing shareholder refuses to accept the share then only the share can be transferred to the third person. This restriction is imposed by law on the company.
2. No public Investment:
Private limited companies can not invite the public for investing in the company. Only the members of the company are entitled to invest.
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