Private Limited Company
Simplifying the process of company incorporation for your business.
What is a Private Limited Company?
A Private Limited Company is a type of privately held business entity in which the liability of its members is limited to the amount of shares they hold. This structure provides numerous benefits, including separate legal identity, limited liability, and access to funding. The separate legal identity of the company means that it can enter into contracts, own property, and incur debts in its name, independent of the owners. This offers protection to the shareholders as their personal assets are not at risk in the event of business debts or liabilities.
Benefits of Private Limited Company
- Limited Liability – Personal assets remain protected.
- Independent Legal Entity – The company can own property and make decisions in its own name.
- Funding Opportunities – Easier to attract investors and secure bank loans.
- Continuity & Stability – Business remains unaffected by changes in ownership.
- Professional Management – Expert directors can manage operations without affecting shareholding.
- Tax Benefits – Potential tax savings and strategic planning options.
- Reputation Boost – A registered company appears more credible to clients and partners.
Things to Keep in Mind
- Legal Compliance is Essential – Annual filings, audits, and regulatory requirements apply.
- Higher Setup & Maintenance Costs – Compared to sole proprietorships, initial costs can be higher.
- Shares Have Transfer Restrictions – Selling shares is more complex than in public companies.
- Ownership vs. Management Conflicts – Decision-making may need alignment between directors and shareholders.
- Corporate Taxes Apply – Depending on jurisdiction, tax obligations may still be significant.
Documents Required
- For Directors & Shareholders:
- PAN Card (Mandatory for all Indian directors/shareholders)
- Passport-Size Photograph (Recent)
- Aadhaar Card, Voter ID, or Driver’s License (As address proof)
- Passport (For Foreign Nationals/NRIs)
- For Registered Office Address:
- Electricity Bill, Water Bill, Telephone Bill, or Latest Bank Statement (Proof of address)
- Notarized Rental Agreement (If rented)
- NOC from Property Owner (Format provided)
- Sale Deed/Property Deed (If owned)
- Additional Requirements:
- Digital Signature Certificate (DSC) (For company directors)
- Director Identification Number (DIN) (For all directors)
- Memorandum of Association (MoA) & Articles of Association (AoA) (Company’s objectives and operational rules)
Mandatory Criteria for Private Limited Company Registration
- Minimum 2 Shareholders & 2 Directors – A Private Limited Company must have at least two directors and two shareholders (can be the same individuals). The maximum limit is 200 shareholders and 15 directors.
- At Least One Indian Resident Director – At least one director must be a resident of India, meaning they have stayed in India for at least 182 days in the previous financial year.
- Unique Company Name – The proposed company name must be distinctive and comply with the Ministry of Corporate Affairs (MCA) guidelines.
- Registered Office Address in India – The company must have a valid business address (residential or commercial), with supporting documents like an electricity bill and NOC from the owner.
- Digital Signature Certificate (DSC) for Directors – Required for electronically signing documents during the registration process.
- Director Identification Number (DIN) for All Directors – Each director must obtain a DIN issued by the MCA.
- Authorized & Paid-up Capital – There is no minimum capital requirement, but the company must declare its authorized and paid-up share capital in the incorporation documents.
- Memorandum of Association (MoA) & Articles of Association (AoA) – These documents define the company’s objectives, structure, and operational guidelines and must be filed during incorporation.
- Tax & Compliance Registrations – The company must apply for PAN, TAN, and GST (if applicable) for taxation and compliance purposes.
Steps to Register
Obtain Digital Signature Certificate (DSC)
All designated partners must obtain a DSC to sign documents electronically.
Apply for Director Identification Number (DIN)
Each director must apply for a DIN through the Ministry of Corporate Affairs (MCA) portal.
Name Reservation with MCA
Choose a unique name and apply for approval through the RUN-LLP (Reserve Unique Name) service on the MCA portal.
Draft MoA & AoA
Prepare the Memorandum of Association (MoA) and Articles of Association (AoA) outlining company objectives and rules.
File Incorporation Documents (SPICe+ Form)
Submit the SPICe+ (INC-32) form, including company details, directors’ information, and required documents to the Registrar of Companies (ROC).
Obtain Certificate of Incorporation
Obtain the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department.
Apply for PAN & TAN
Obtain Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department.
Open a Corporate Bank Account
Use the Certificate of Incorporation, PAN, and MoA/AoA to open a company bank account.
Register for GST & Other Licenses (If Applicable)
Depending on business activities, register for GST, MSME, Import Export Code (IEC), or other applicable licenses.