Overview of Private Limited Company Registration in India

In India, a Private Limited Company stands out as a popular business structure regulated by the Companies Act, 2013. Entrepreneurs aiming to establish a company in India find it crucial to undergo Private Limited Company Registration. This not only fosters the development of a strong business framework but also offers directors the advantage of limited liability . To register a Company under the Companies Act, 2013, it needs to be registered with ROC (Registrar of Companies) as per the guidelines & norms laid down by the MCA.

GST Walaoffers a cost-effective service to facilitate the Private Limited Company Registration process, managing legal formalities and ensuring adherence to MCA regulations. Upon successful registration, you receive a Certificate of Incorporation, along with PAN and TAN documents, enabling you to smoothly initiate business operations after setting up a current bank account.

What are the different types of Business Structures in India?

Let’s discuss the different types of business structures in India, following is the list of same:

1. Private Limited Company

This Company is the most prevalent & popular type of corporate legal entity in India. Private Limited Company is a privately held business entity and Company is privately held by the shareholders & the maximum number of shareholders shouldn’t be more than 200. Similarly, the liability arrangement in a Private Company is that of a Limited Partnership, wherein the shareholder’s liability extends only up to the number of shares held by them. Usually, a Private Company in India doesn’t offer or trade its shares to the general public on the stock exchanges, but rather the private stock of the Company is traded or owned.

2. Public Limited Company

This Company is a group of members which is incorporated under the Companies Act and it has a separate legal existence & the liability of its members are limited to the share they hold.

3. OPC or One Person Company

A One Person Company is a company established by only one person. A single person established & managed the Company. A One Person Company has all the features of a Company like limited liability, perpetual succession & a separate legal entity.

4. LLP or Limited Liability Partnership

Limited Liability Partnership is an alternative corporate business that gives the benefits of limited liability of a Company & the flexibility of a Partnership. It is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the Limited Liability Partnership.

5. Sole Proprietorship

This is a business that is completely owned & controlled by a single person, a Company or a Limited Liability Partnership. There are no partners in the business. Sole Proprietorship is not a separate legal entity from the business owner. The business owner has unlimited liability that means the owner is personally liable for all the debts & losses of the Sole Proprietorship.

Why is it necessary to choose the right business structure in India?

In India, choosing the right business structure is a vital part of running a business. Whether you are just commencing your business or your business is growing, it is vital to understand the options. Your legal structure of a business determines your tax rates, management & paperwork requirements, fundraising abilities & more. Partnerships & Sole Proprietorship are comparatively easy to commence, but they lack liability protection.

It is vital to choose your business structure very carefully as your ITR will depend on it. While incorporating your company or entity, remember that each business structure has different levels of compliance that need to be fulfilled. For instance, a sole proprietor has to file only an ITR. However, a Company has to file an income tax return and annual returns with the ROCs.

Books of Accounts of a Company should be mandatorily audited every year. Abiding by these legal compliance requires spending more money on auditors, tax filing experts & accountants. Hence, it is vital to select the correct business structure when thinking of Private Limited Company Registration. An entrepreneur must have a clear understanding of legal compliances he or she is willing to deal with.

Benefits of Private Limited Company Registration in India

Following are the benefits of Private Limited Company Registration in India:

1. Separate Legal Existence

The Company enjoys a separate legal existence from the owners and it can enter into its own assets, contracts & sue the 3rd parties in its own name. As a separate entity, it has a perpetual existence even beyond the members’ lifetime.

2. Ease in Raising Funds

Being a highly compliant structure, banks prefer to issue loans easily to Companies. Private Limited Company offers key benefits like the ease in limited liability protection for owners & ownership transfer.

3. Limited Liability

By incorporating as a Private Limited Company in India, owners can limit their liabilities to their capital contribution commitment. Their personal assets are safeguarded from any big loss or debt in the business, unlike Proprietorship Firms & Partnership.

4. Easy Transferable

One of the main benefits of Private Limited Company Registration is the share can be easily transferred to the other person without any complications & hassle.

5. ESOP (Employee Stock Option Plans)

Private Company can issue Employee Stock Option Plans to its employees subject to the limitation of the number of shareholders. Section 61 of the Companies Act enables a Private Company to issue Employee Stock Option Plans to its employees.

Checklist for Private Limited Company Registration in India

Following is the important checklist for Private Limited Company Registration in India:

• A minimum of 2 Directors are required
• A minimum of 2 Shareholders and a maximum of 200 Shareholders are required
• DSC or Digital Signature Certificate for all the designated Directors
• DIN or Director Identification Number of all the Directors of the Company
• At least 1 Director must be an Indian Resident
• Company’s Name which is not similar to any other existing Company name
• Authorized Capital of a Private Limited Company
• MoA (Memorandum of Association) & AoA (Articles of Association)
• Proof of registered office

Documents Required for Private Limited Company Registration in India

Following is the list of all the vital documents required for Private Limited Company Registration in India:

List of documents related to the designated Director of the Company:

• Aadhar and PAN Card of the Directors
• Latest passport-sized photos of all the proposed Directors
• Identity proof of the Directors
• Address proof of the Directors

List of documents related to the Company:

Proof of registered office of the Company. The following documents must be submitted as address proof of the Company:

• Rental Agreement or Tenancy Agreement between the landlord and Company
• Letter/NOC from the Landlord of their permission to use the premise or office as the company’s registered office
• Sale Deed of the Company premise in the Company’s Name
• MoA & AoA of the Company

Procedure for Private Limited Company Registration in India

Following is the step-by-step procedure for Private Limited Company Registration in India:

Step 1: Get DSC and DIN

As we know that the Private Limited Company Registration is completely online and you must file the application for Private Limited Company Registration online, so it is necessary to obtain Digital Signature Certificate to authenticate the documents you upload on the MCA portal. Also, you need to get a DIN to access the application form for the Private Limited Company Registration. Our experts will help you in obtaining DSC and DIN in minimal time.

Step 2: Filing Incorporation Form (SPICe+ Form)

You can apply for Company Name Approval and PAN & TAN of the Company in 2 different parts as we mentioned below:

SPICe+ Part-A Form

In this Form, you need to pick 2 best names for your company. The SPICe+ Part A Form has the following fields:

1. Company Type

First, select “Private Limited Company” from the different types of Company Structures listed down in the form.

2. Class of Company

Then, choose the class of company whether a Company is Private, Public or One Person.

3. Category of Company

After that, choose if you want the Company to be limited by shares, by guarantee or have unlimited shares. The most popular one is to keep the Company limited by shares.

4.Sub-Category of Company

Choose the relevant sub-category with the help of our experts.

5. Main division

The Ministry of Corporate Affairs (MCA) has designated unique codes to the main divisions. Choose the one that fulfills your business requirements.

6. Description of the main division

In this section, you need to explain your business idea and specify the purpose of the products and/or services that you are going to offer in a detailed manner.

7. Proposed Company’s Name

Then, you can propose 2 names here.

Note: Once you completed SPICe+ Part-A Form and submitted it to the MCA, then it will take 3-4 days to approve. In case, both the proposed names get rejected, then you will get a 2nd chance to file for 2 more Company names. If all your 4 suggested names get rejected, then you need to file SPICe+ Part-A Form all over again.

But remember one thing, before filing the form you need to check if a Company with the identical name is already registered or not on the MCA portal. Once your Company’s name gets approval from MCA, then you can start filing the SPICe+ Part-B Form.

SPICe+ Part-B Form

Once the Company name has been reserved, then you need to file an application under SPICe+ Part-B Form along with the documents. The applicant is required to provide details regarding the designated Directors & Shareholders of the Company, details regarding the Company’s resources & registered office. You can also apply for PAN & TAN at this stage. The applicant is also required to conduct a pre-scrutiny check to review the correctness of the information filed under SPICe+ Part-B Form. Once the scrutiny check is done, then you can submit the Form.

Note: Also, there are certain forms which are to be filed along with the SPICe+ Part-B Form. The form which are associated with the SPICe+ Form are SPICe+ MoA, SPICe+ AoA, AGILE Pro, INC-9 and URC-

The applicant must ensure that SPICe+ MoA and SPICe+ AoA Forms are filled as per the instructions provided under Schedule 1.

Step 3: Certificate of Incorporation

After the verification of the application & documents, the MCA grants the Certificate of Incorporation. Basically, it’s conclusive proof of the existence of the Company, wherein the Incorporation Date, CIN (Company Identification Number), PAN & TAN are mentioned with the sign & seal of the Registrar. Moreover, DIN is allotted to Directors with the Registration Approval. The CIN receipt is the proof of the legal existence of your business.

Name and Capital of the Company

Lets’ discuss the name and capital of the company:

Capital of the Company

To start a Private Limited Company in India, there is no requirement of minimum paid-up capital, but for the Public Limited Company there is a minimum of Rs 5 lakhs paid-up capital required. The Paid-up Capital means the amount of money a Company has received from shareholders in exchange for shares of the Company. It is created when a Company sells their shares in the market directly to investors, generally via an IPO (Initial Public Offering).

The minimum authorized capital of any company must be Rs. 1 lakh. The authorized capital means the maximum amount of share capital that the Company is authorized by its MoA (Memorandum of Association) to issue to its shareholders and the authorized capital must be mentioned in the Memorandum of Association.

Capital of the Company

The Company’s Name should be proposed in the Form SPICe+ 32 application form and only one suggested name along with the importance of keeping that name can be given in the Form SPICe+ 32 application. The type of company & one suggested name for the company is to be entered for reserving the Company’s Name.

The name shouldn’t be identical or similar to the existing name of any Company. In case the suggested name gets rejected, then another name can be submitted by applying another Form SPICe+ 32 application & paying the prescribed fees. A Private Limited Company should have the name in the form of ABC Pvt. Ltd.

Compliances under Companies Act

In India, a Company which has been registered under Companies Act, 2013 must ensure compliance with the Companies Act, 2013. In India, the Companies Act, 2013 regulates:

• Qualification, appointment, remuneration & retirement of Company’s Directors.
• How to conduct Board & Shareholders Meeting.
• The presentation & preparation of annual accounts and the regular maintenance of books of accounts.

Following are some vital post incorporation compliances:

• Once you get the Certificate of Incorporation, a separate legal entity for the Company is established
• Once you get the Certificate, within 30 days one of the Company’s Directors must issue the notice for the 1st Board Meeting of the Company and at least 7 days prior to the latter being scheduled for
• In the 1st Board Meeting, the Company must appoint its 1st Auditor within 30 days of Incorporation by its BoDs or Board of Directors and every Company’s Director shall disclose their concern or interest of other Companies in the Form MBP-1. Moreover, in case of any change in Director’s interest he or she should disclose the change in the next upcoming Board Meeting, also he or she shall disclose in the annual disclosure to be made in the 1st Board Meeting of the F.Y.
• The Company shall on & from the 15th day of its incorporation & at all-time thereafter have a registered office which is capable of getting & acknowledging all official communications & notices as may be addressed to it. Verification of the registered office is to be filled in Form INC-22 within 30 days of Company Incorporation.
• It is compulsory for the Company to have its name board outside its registered office along with Company’s Name, CIN, address, phone number, fax number, email id & website address, if any.
• It is necessary for the Company to have a PAN & TAN right after its incorporation. Even, these are the basic credentials required to open a new Bank Account in India.
• Filing & maintaining of P&L Account, annual return & balance sheet every Financial Year together with an auditor’s report before the due date with the ROCs is necessary for the Company.
• As per Companies Act, the Company is also required to conduct minimum 4 board meetings during the calendar year at stipulated intervals & also ensure that all the Minutes of the Board Meeting are safely retained until Company exists. The Minutes of the Meeting (MoM) required to be prepared within 15 days of the meeting & can be finalized within the 30 days of the meeting.
• Issuance of Share Certificates to the shareholders is a vital requirement & all details of such issuance of share certificate are required to be maintained & mentioned in the Register of Allotment.
• In India, every Company is required to maintain certain Statutory Registers under Section 85, Section 88, etc., of the Companies Act, 2013 & required to keep & maintain at its registered office in the prescribed form. In case of any failure in maintaining the statutory register, the Company & Directors may be fined & prosecuted.
• There are some more important compliance measures where a Company is required to intimate the ROCs. It includes appointments & removal of Director and certain other changes in the prescribed manner.
• The Companies Act, 2013 has also introduced the CSR or Corporate Social Responsibility provisions. Provisions under the CSR, companies are obligated to make the contribution in some philanthropic activities. Companies must fulfill the CSR criteria & undertake CSR activities in the Financial Year.
• All the above-mentioned compliance requirements only apply to the Companies Act, 2013. Moreover, further registrations are required depending on the turnover & type of the business like GST Registration, Professional Tax Registration, etc. It is vital to note that the Company’s responsibility to comply with all rules & regulations provided in the Companies Act is not a one-time thing, but is a continuous affair.

How GST Wala Helps in the Private Limited Company Registration Process?

With GST Wala, you can set up your Company easily in just a few days. Our Private Limited Company Registration package includes:

• Company Name Approval
• Obtaining DSC & DIN for Directors
• Filing SPICe+ Form
• Issuance of COI (Certificate of Incorporation) along with PAN & TAN
• Opening of current account for your Company
• Stamp Duty payment for authorized capital up to Rs. 1 lakh except for the states of Kerala, MP & Punjab.