How to register a private limited company in India?
Private limited companies are a popular choice of business entities in India. The Pvt Ltd Company Registration in India is done as per companies regulation act 2013 and incorporation rule 2014.
What is needed to register a private limited company?
For Online Private Limited company registration in India, one has to fulfil some basic eligibility requirements.
- A Pvt Ltd company registration in India can be formed with a minimum of 2 numbers and a maximum of 200 numbers.
- Among the two or 15 directors of the private limited company, at least one should be the resident of India. A person is considered as resident of India if he/she spends 186 days in India annually.
- Even NRIs and foreign companies can be shareholders or directors of the company through foreign direct investment.
- While the shareholders of the company can be a corporate entity or individual, the director of the company must be a person.
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Benefits of registering a private limited company
- If you are a business owner looking to raise the capital for your business, forming a private limited company will benefit. One can easily raise capital investment through venture capital firms, agile investors and shareholders.
- The shareholders of the company will enjoy limited liability protection. The liability of the person will be limited to the investment made by him in case of any unforeseen liabilities created.
- The business will be recognized as a separate legal entity so, your company can have separate PAN, bank accounts and liabilities in its name.
- The existence of the company winds up only when their partner decides to do so or by the government decision in case of non-compliance of regulations.
- Ownership of the company can be easily transferred to any individual, legal entity or a person abroad. Even the replacement of directors is easy in the case of a private limited company as shareholders control it.
Steps to form a private limited company
Obtain a digital signature certificate
The first step for forming a private limited company is to obtain a digital signature first, which is needed for many things later in the formation of a private limited company. The digital signature is issued by concerned authority on applying for it and is valid for 2 years. To obtain a digital signature certificate, you need passport size photograph, self-attested address proof and PAN of the applicant.
Direct identification number
The second step of forming a private limited company is to obtain a direct identification number. It is a number given by the ministry of corporate affairs for the individual applicant. The number serves lifetime validity unless withdrawn. Every director of the company will have intimate DIN so, applying for one is a mandate.
Reserving name
Before making an application to form a private limited company, the name of the proposed company should be reserved. You can reserve the proposed name by filling e- form INC-1 after paying the designated fee. You can list out a maximum of 6 names in the preferred order. Professional will conduct a search for availability of name before making an application. However, the approval of the company’s name stands at the discretion of the registrar. After approval, the name will be kept reserved for 60 days so; you should make an application for incorporation of the company within the stipulated time.
Certificate of incorporation
The final step is to obtain a certificate of incorporation by submitting the needed application. You can apply for online private limited company registration through simplified format for incorporating company which are also known as SPICe forms. You should also file MOA and AOA along with the SPIC forms for applying registration of the private limited company in India.