Procedure of Private Limited Company Registration in India
Every person interested in opening a new venture in India has to obtain business registration in one or the other form. There are various types of companies in India governed under the Companies Act of 2013. For example, the Proprietorship Firm, a Sole Proprietorship, or a One Person Company.
However, the most common form of business venture found in India is the Private Limited Company. If you are interested in opening a Private Limited Company then you must go through Pvt Ltd Company registration. The procedure for the same is discussed in this article. So, keep reading to know more about Private Limited Company registration.
Introduction to Private Limited Companies
Private Limited Company is the most popular form of company type in India because of the benefits it provides to the business owner. As per Section 2 (68) of the Companies Act, 2013, a Private Limited Company means a company having a paid-up share capital of Rs. 1 Lakh or more. Also, according to the same section, a Private Limited Company is one;
- Which restricts the right to transfer its shares,
- And which limits the number of its members to two hundred.
Overview of Private Limited Company Registration
Private Limited Company is a type of company which is privately maintained business venture in India. Also, it is a highly recommended type of business venture for new startups and companies. Minimum 2 shareholders and a maximum of 200 number of shareholders are allowed in a Private Limited Company. Whereas, a minimum paid-up capital of 1 lakh rupees is required to register a Private Limited Company.
Furthermore, the number of directors allowed in a Private Limited Company is at least 2 and up to 15. Additionally, a foreign national could also become a director in such a company. Moreover, the important point to remember for all Private Limited Companies is that they must affix the “Pvt. Ltd.” after their company name.
Benefits of Private Limited Company Registration: Why should you go for Pvt Ltd Company Registration?
Private Limited Companies has the following benefits over any other type of business entity in India;
- Helps draw more customers
- It increases the credibility of your business.
- Easier to raise funds from various governmental and non- governmental sources and provides more attractive stability
- Help owners from personal liability and protects from other risks and losses.
- The owners of a private limited company have limited liabilities. It means the private assets of the owner are not at stake when the company suffers any loss.
- It has a separate legal identity
- Offers limited liability to preserve your company’s assets
- Ease of obtaining bank credits
- Enhance the potential to grow big and expand business
Basic Requirements for Private Limited Company Registration
There are some requirements before initiating a Private Limited Company registration;
- The private limited company must have a unique name which must not be the same as any other registered company or trademark.
- It must have a minimum of two directors.
- Also, keep in mind that a private limited company must have a minimum of two shareholders.
- You need to obtain a digital signature certificate for all the company’s directors & members of your private limited company beforehand.
- You should have a unique name for your company for the quick registration of your firm.
- The company or the owner must not have any offensive activity associated with their name.
Procedure for Company Formation Online
The following is the process for the private limited company formation online;
Submit documents: Submit all the required documents and identity proofs as mentioned above.
Get name approval: Submit an application for the approval of the name of your company through the RUN – Reserve Unique Name form to register your unique company name. for this step, you can provide up to two names which are unique and not the same as any other company or trademark. In case your application gets rejected, you can re-apply for name approval with a different set of company names. This can also be done with the help of the SPICe form.
Obtaining DSC: Obtaining Digital Signatures of the proposed directors is necessary at it is required at the time of signing of the incorporation application. Therefore, obtaining DSCs of all the directors is necessary.
Filing of SPICe form: SPICe (Simplified Performa for Incorporating Company
Electronically) or form INC -32 is the incorporation form submitted to the MCA- Ministry of Corporate affairs to register a private limited company. This stem can only be done after you have obtained DCS for the directors of your company.
Company current account: Lastly, you have to open a current account in the name of the company. Furthermore, all the transactions have to be done through this account.
These are the details how you can register a private limited company in India. We hope you find this information helpful and it will help you incorporate a private limited company of yourself.
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