Private Limited Company

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Private Limited Company

  • Company Registration
  • Share Certificates
  • Current Account Opening

For Payment

Documents required For Private Limited Company

PAN Card
PAN is mandatory for Indian Directors.
Passport (Foreign Nationals Only)

Passport is mandatory for Foreign Directors or Shareholders.

Aadhaar Card

Aadhaar is mandatory for Indian Directors.

Company Registration in India

What is a Private Limited Company?

 A private limited company is a company whose shares are not listed on a stock exchange, have limited liability, and have a separate legal identity from the owners. Because they are not listed on a stock exchange, their shares are not traded to the general public.

A private limited company is common for a new company. They range from small to large-scale companies. Their initial capital may come from the owner’s money, the family, or from private equity.

When companies need additional capital to finance expansion, they can sell their shares to the public through the stock exchange. When done, the company turns into a public limited company. In addition, they can also raise funds by issuing debt securities such as bonds and medium-term notes.

Minimum Requirements for Company Registration Process

Before we get into the company registration process, here are the 4 basic requirements for registering a private limited company in India.

1. Minimum 2 directors

As per the Companies Act, 2013, one director must be an Indian resident who has continuously stayed in India at least for 12 months (as recently amended). Another one can be a foreign or Indian resident.

2. Minimum 2 shareholders

Shareholders can be a person or corporate entity. In the case of a corporate entity, a person is authorized to represent the company as a shareholder.

3. Registered office address in India

The Registered Office (RO) of the company must be in India. And, the company can choose a commercial or residential property as their RO Address.

4. Unique business name

Entrepreneurs are very particular about the name of their company. However, they need to make sure that it is unique enough

Documents Required for Company Registration

Private limited companies require the following documents to set up:

  • Memorandum of association: It talks about the purpose of setting up a business, the nature of business, the objective of a company and the capital clause. It is a corporate document, which is also called a charter of the company and defines a company’s relationships with shareholders and specifies the company’s goals.

  • Article of association: This document talks about the internal operating system of the company. It explains the managing process, duties and responsibilities of each member, dividend policy, shareholder meetings and appointment of directors.

  • Certificate of incorporation: It is the certificate or license that the directors receive after submitting all required documents for registration. It is the primary document of authentication of the company and the Registrar of Companies(ROC) issues this document in India.

  • Other documents: Other documents include ID proof (PAN card, Aadhaar card), address proof (ration card, voter id), rental agreement, NOC from the property owner and a copy of the sale deed for the owned property for all directors and shareholders of the company.

  • Minimum Capital Requirement:

    Authorised capital of a Private Limited Company:

    Authorised capital marks the maximum share capital out of which shares can be issued in a private limited company. This authorised capital is usually cited in the Memorandum of Association of the company and is mostly fixed as ₹100,000. However, it can be increased with the consent of the shareholders and by paying the required fee to the Registrar of Companies (RoC). The authorised capital denotes the net worth of a company.

    Paid-up capital of a Private Limited Company:

    Paid-up capital, on the other hand, is the actual amount of money that is acquired by the company by means of issuing shares to the shareholders. The paid-up capital is always lesser than the authorised capital of the company, as the company cannot issue shares over and beyond the authorised capital. The paid-up capital thus received is often utilised for managing the expenses of the company.

  • Steps to register as a Private Limited Company

    A private limited company registration process entails a few simple steps for which applicant need only the most basic documents. Below are five easy steps towards setting up private limited company:

    Step 1: DSN and DPIN Application: Applicant needs to apply for a Digital Signature Certificate (DSC) and Director’s Pin (DPIN), where the DSC is essentially an online signature that can be used for form filling. DPIN is issued by the Ministry of Corporate Affairs (MCA).

    Step 2: Approval of Name: To set up a private limited, applicant will need to provide at least 3 optional names that are clearly descriptive about the company’s business.

    Step 3: MOA and AOA: One of the important steps towards creating one’s company is the drafting of a Memorandum of Association (MOA) and Articles of Associate (AOA).

    Step 4: Incorporation Certificate: Private limited company is officially set up for business in a span of about a month where the incorporation certificate confirms it and also includes the crucial Corporate Identity Number (CIN) number.

    Step 5: Applying for the PAN and bank account: After receiving the incorporation certificate, applicant will get his/her PAN and TAN card within a week, after which he/she can submit PAN, AOA and MOA to the bank to open bank account.

  • Mandatory Compliances for a Private Limited Company in India

Auditor appointment: An auditor will be appointed and a form ADT-1 will be filed for a 5-year appointment. Within a month after the company’s establishment, the first auditor will be chosen.

Statutory Audit of Accounts: Every Company shall prepare its Accounts and get the same audited by a Chartered Accountant at the end of the Financial Year compulsorily. The Auditor shall provide an Audit Report and the Audited Financial Statements for the purpose of filing it with the Registrar.

Filing of Annual Return (Form MGT-7): Every Private Limited Company is required to file its Annual Return within 60 days of holding of Annual General Meeting. Annual Return will be for the period 1st April to 31st March.

Filing of Financial Statements (Form AOC-4): Every Private Limited Company is required to file its Balance Sheet along with statement of Profit and Loss Account and Director Report in this form within 30 days of holding of Annual General Meeting.

Holding Annual General Meeting: It is mandatory for every Private Limited Company Company to hold an AGM in every Calendar Year. Companies are required to hold their AGM within a period of six months, from the date of closing of the Financial Year.
Preparation of Directors’ Report: Directors’ Report will be prepared with a mention of all the information required under Section 134.
Statutory Audit Compliances.

advantages of private limited company

There are several advantages of a private limited company, including:

  1. Limited liability: Shareholders’ liability is limited to the amount they have invested in the company. This means that in the event of any financial difficulties or legal action, the personal assets of shareholders are not at risk.

  2. Separate legal entity: A private limited company is considered a separate legal entity from its shareholders. This means that the company can own assets, enter into contracts, and sue or be sued in its own name.

  3. Perpetual existence: A private limited company has a perpetual existence, meaning that it continues to exist even if the ownership or management changes.

  4. Ability to raise capital: Private limited companies can raise capital by issuing shares to investors. This can be an effective way to raise funds for expansion or other business activities.

  5. Greater credibility: Private limited companies often have greater credibility with customers, suppliers, and lenders than sole proprietorships or partnerships, as they are seen as more established and stable.

  6. Tax benefits: Private limited companies may be eligible for certain tax benefits, such as lower corporate tax rates and deductions for business expenses.

  7. Ease of transferability of ownership: Shares in a private limited company can be easily transferred or sold, allowing shareholders to exit the company or sell their stake in it if desired.

Overall, a private limited company offers several benefits and can be a good option for entrepreneurs looking to establish a business with limited liability, greater credibility, and the ability to raise capital.

disadvantages of private limited company:

  1. Cost of formation: The cost of setting up a private limited company can be higher than other business structures, such as sole proprietorships or partnerships, due to legal and administrative requirements.

  2. Compliance and regulations: Private limited companies are subject to various compliance and regulatory requirements, such as filing annual returns and financial statements, holding shareholder meetings, and maintaining proper records. Failure to comply with these requirements can result in penalties or legal action.

  3. Limited control: Shareholders may have limited control over the company’s management and decision-making processes, especially if they hold a minority stake.

  4. Difficulty in raising capital: Although private limited companies can raise capital by issuing shares, it can be difficult to attract investors, especially if the company is small or unproven.

  5. Restrictions on ownership transfer: The transfer of ownership in a private limited company can be restricted by the company’s articles of association, which can make it difficult for shareholders to sell their shares or exit the company.

  6. Increased public scrutiny: Private limited companies are required to disclose certain information to the public, such as financial statements and details of the company’s directors and shareholders, which can increase public scrutiny and potentially harm the company’s reputation.


gst registration image
GST-Registration Service

Private Limited Company FAQ’s

1. What steps are involved in registering a company?

According to the 2013 Companies Act, the Ministry of Corporate Affairs (MCA) oversees the registration of businesses.

Apply for a Director Identification Number in Step 1. (DIN)
Step 2: Request a certificate of digital signature (DSC)
Step 3: Approval of the company name
Step 4: Submitting the Application for Business Incorporation
Step 5: Get an incorporation certificate

2. What is the cost of registering a company?

The size and number of stakeholders affect the registration fee for a company in India. Depending on the following factors, the cost to incorporate a private limited company might range from Rs. 6, 000 to Rs. 30,000:

Amount of Directors
Amount of Members
Professional fees for authorised shares of capital

3. Can NRIs, foreigners, or foreign organisations register a business in India?

Yes, pursuant to the Foreign Direct Investment guidelines established by the RBI, NRIs, foreigners, and foreign companies may form a company and make investments in India. Yet, according to Indian incorporation laws, the company’s Board of Directors must include at least one Indian citizen.

6. Is GST registration now required?
For certain firms, filing for GST is required. Businesses engaged in interstate business, including e-commerce activities, and businesses with annual revenue above Rs. 40 lakhs are needed to get the relevant licences. With IndiaFilings, GST registration takes just 3-5 working days.

7. What regulations must a private limited company follow?
Once a business is established, it must continue to comply with specific regulations. Within 30 days, an auditor must be hired, and yearly returns and income taxes must be filed each year. In addition to this, it’s also necessary to complete obligatory compliances like the DIN eKYC and “Commencement of Business” forms.

8. When will the legal auditor be chosen?
Within 30 days after incorporating a private limited company, the Board of Directors must hire a chartered accountant who is currently in practise.

9. Which Form Should a Private Limited Business File an ITR With?
Each year, Private Limited Businesses with Indian corporate registrations must submit Form ITR 6 ITR reports.

10. Which form should be used to file a company’s yearly returns?
The MCA annual return must be submitted annually by businesses with Indian registrations, according to AOC 4 and MGT 7.

11. What number of shareholders are needed to form a private limited company?
A Private Limited Corporation must be founded with a minimum of 2 members and a maximum of 200 members.

12. How is transfer of ownership possible?
A Private Limited Company’s ownership may be transferred via shares.
13. How is the taxation of the Companies? Which tax rates apply?
Taxes on Private Limited Businesses are 30% plus any relevant surcharges and cess.
14. Who oversees and supervises a Private Limited Company’s operations?
The MCA and Companies Act, 2013, regulates how a Private Limited Corporation operates.
15. What advantages come with setting up a private limited company?
Limited Liability, Access to Funding, Borrowing Capacity, Greater Capacity, Easy Exit, and Scope of Many Opportunities are some of the benefits of registering as a Private Limited Corporation.

What are authorised capital and paid-up capital, respectively?
The maximum amount of stock that a corporation is permitted to issue is known as authorised capital. In contrast, paid up capital refers to the number of shares that the firm has issued to shareholders. After incorporation, authorised capital may be increased if more shares are to be issued to shareholders.
What exactly is limited liability protection?
A firm that has limited liability is only held liable for a small portion of its debts. The shareholders’ liability with regard to the obligations of the business is constrained, unlike in sole proprietorships and partnerships.

18. How may a current account be opened?
After incorporation, a current account must be created in the company’s name for transactions. Your adviser will assist you in selecting the bank with which you wish to create an account and in obtaining the necessary paperwork, such as a copy of the board resolution, the memorandum and articles of association, the incorporation certificate, and utility bills.


Related Business Registrations

In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.


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