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0 Private limited company registration in India is a legal process that enables a group of people to come together and establish a business with limited liability. A private limited company is one of the most popular business structures in India, as it offers several benefits, such as flexibility in operation, limited liability protection, and ease of doing business.
In this article, we will discuss the process of private limited company registration India, including its requirements, documents, and fees.
What is a Private Limited Company?
A private limited company is a type of business structure in which the business is owned and managed by a group of people known as shareholders. The liability of the shareholders is limited to the amount of capital they have invested in the business. This means that their personal assets are protected from the company’s debts or losses.
A private limited company can have a minimum of two and a maximum of 200 shareholders. It is considered a separate legal entity from its owners, which means that it can enter into contracts, sue or be sued, own property, and borrow money in its name.
Requirements for Private Limited Company Registration
To register a private limited company in India, there are certain requirements that must be met:
- Directors: A private limited company must have a minimum of two directors, and at least one of them must be a resident of India. The directors must be over 18 years of age and should not have been declared bankrupt.
- Shareholders: A private limited company can have a minimum of two and a maximum of 200 shareholders. The shareholders can be individuals or corporate entities.
- Name: The name of the company should be unique and not similar to the name of any existing company. The name should also not be offensive or violate any trademark or copyright laws.
- Capital: A private limited company must have a minimum paid-up capital of Rs. 1 lakh.
- Registered Office: A private limited company must have a registered office address in India, which should be a physical address and not a P.O. box.
Documents Required for Private Limited Company Registration
To register a private limited company in India, the following documents must be submitted:
- Identity Proof: PAN card, Aadhaar card, or passport of all the directors and shareholders.
- Address Proof: Driving license, voter ID card, Aadhaar card, or passport of all the directors and shareholders.
- Passport size photographs of all the directors and shareholders.
- No Objection Certificate (NOC) from the owner of the registered office premises.
- Memorandum of Association (MOA) and Articles of Association (AOA): These are the two main documents that define the objectives, rules, and regulations of the company.
- Form INC-9: This is a declaration by each of the subscribers to the MOA that they have not been convicted of any offence.
- Form DIR-2: This is a declaration by each of the directors that they are not disqualified to act as directors of the company.
- Form INC-22: This is a declaration that the company has a registered office address.
- Form INC-20A: This is a declaration that the company has received the minimum subscription amount before the incorporation.
- Bank Account Details: Bank statement or canceled cheque of the company’s bank account.
Process for Private Limited Company Registration
The process for private limited company registration in India involves the following steps:
Step 1: Obtain Digital Signature Certificate (DSC)
The first step is to obtain a Digital Signature Certificate (DSC) for all the directors and shareholders. A DSC is a secure digital key that is used to sign electronic documents digitally.
Step 2: Apply for Director Identification Number (DIN)
The next step is to apply for a Director Identification Number (DIN)
for all the directors. DIN is a unique identification number assigned by the Ministry of Corporate Affairs to each director. It is mandatory for all directors to have a DIN.
Step 3: Reserve the Company Name
The third step is to reserve a unique name for the company. This can be done through the Ministry of Corporate Affairs’ online portal. The name must be in accordance with the Companies Act, and it should not be similar to any existing company name.
Step 4: Draft the Memorandum of Association (MOA) and Articles of Association (AOA)
The MOA and AOA are the two main documents that define the objectives, rules, and regulations of the company. They must be drafted in accordance with the Companies Act and must be signed by all the subscribers to the MOA.
Step 5: File the Incorporation Documents
The next step is to file the incorporation documents with the Registrar of Companies (ROC). The documents to be filed include Form INC-32 (SPICe), which is a combined form for incorporation of the company, along with Form INC-33 (eMOA) and Form INC-34 (eAOA), which are electronic versions of the MOA and AOA.
Step 6: Obtain Certificate of Incorporation
Once the ROC verifies and approves the incorporation documents, the company is registered, and a Certificate of Incorporation is issued. This certificate contains the name, registration number, date of incorporation, and other details of the company.
Step 7: Apply for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN)
After obtaining the Certificate of Incorporation, the next step is to apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the company.
Step 8: Open a Bank Account and Register for Goods and Services Tax (GST)
The final step is to open a bank account in the company’s name and register for Goods and Services Tax (GST), if applicable.
Fees for Private Limited Company Registration
The fees for private limited company registration in India depend on the authorized capital of the company. The following table provides an overview of the fees:
| Authorized Capital | Fee |
|---|---|
| Up to Rs. 1 lakh | Rs. 2,000 |
| Rs. 1 lakh to Rs. 5 lakhs | Rs. 3,000 |
| Rs. 5 lakhs to Rs. 10 lakhs | Rs. 4,000 |
| Rs. 10 lakhs to Rs. 50 lakhs | Rs. 5,000 |
| Rs. 50 lakhs to Rs. 1 crore | Rs. 6,000 |
| Above Rs. 1 crore | Rs. 7,000 |
Benefits of Private Limited Company Registration
There are several benefits of registering a private limited company in India:
- Limited Liability: The liability of the shareholders is limited to the amount of capital they have invested in the business. This means that their personal assets are protected from the company’s debts or losses.
- Separate Legal Entity: A private limited company is considered a separate legal entity from its owners, which means that it can enter into contracts, sue or be sued, own property, and borrow money in its name.
- Perpetual Existence: A private limited company has perpetual existence, which means that its existence is not affected by the death or retirement of its shareholders or directors.
- Better Access to Capital: A private limited company can raise capital by issuing shares to investors. This allows the company to raise more capital than a sole proprietorship or partnership.
- Professionalism: Registering a private limited company adds a level of professionalism to the business and increases its credibility among customers,
Conclusion
Registering a private limited company in India is a simple and straightforward process that can be completed in a few weeks. It offers several benefits, such as limited liability, separate legal entity, perpetual existence, access to capital, tax benefits, and brand recognition.
However, before registering a private limited company, it is important to carefully consider the business’s goals, objectives, and financial resources. It is also recommended to seek the advice of a professional, such as a chartered accountant or company secretary, to ensure compliance with all legal and regulatory requirements.
