A Private Limited Company Registration is the most popular form of corporate legal registration in India. The Ministry of Corporate Affairs governs the company registration in India as per the Companies Act, 2013, and the Companies Incorporation Rules, 2014. The process can be initiated with a minimum of two Directors (Individuals only) and two Shareholders (Individuals or Corporate entities). Both Directors and Shareholders may or may not be the same person.
A Pvt Ltd Company Registration is preferred over other forms of registrations, as it ensures limited liability and provides a separate legal entity to the business. The company incorporation procedure results in clear ownership of the company defined by the share capital. The incorporation of a company is the first step in scaling your business, as it paves the way for outside funding while enabling you to attract top talent by offering stock options. However, one needs to take into account mandatory audits and higher compliance which could be tough to maintain. On the other hand, higher compliance will lend better credibility to your business than any other form of incorporation of a company in India.
UPDATE: The entire procedure of the company registration has recently been amended. New online forms SPICE+ and Form Agile pro have been introduced. Now application for registrations like GST, EPF, ESIC, professional tax can be done simultaneously. Also, the application for bank account opening can be made at the time of filing the Company registration application.
The liability of the shareholders of a Private Limited Company is restricted to the capital invested in the company, hence limiting the risk to the business Investment and preventing personal assets from the risk of attachment.
A Private Limited Company is the most preferred entity type for Investors. Registering a private limited company will give you an opportunity to raise funds via bank loans, Angel Investors, Venture Capitalists, etc.
It is difficult for startups to attract and retain talent due to uncertainty involved. Private limited company registration in India instils confidence and helps you attract the right talent.
A Private Limited Company also commands better credibility when compared with an LLP or a proprietorship firm. From corporate customers to the government, a private limited company will also have an edge in securing the business.
Two names for the proposed Company, in the order of preference, are applied online through SPICE+ Part A.
Documentation and Certification for DSC (Digital Signature Certificate) is applied with the relevant authorities.
An online application for the registration of a company is filed in SPICE+ Part B, together with SPICE+ MOA, SPICE+ AOA, Agile Pro, and INC-9.
As the application gets approved, COI, PAN, TAN, EPF and ESIC Registration number get allotted in the name of the Private Company.
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Spice means Simplified Proforma for Incorporating Company electronically which provides a single window for multiple applications under one form. Along with the application for company registration, an applicant in returns gets allotted DIN numbers for maximum three directors, PAN, TAN, registration under EPF, ESIC, Professional Tax, GST and Bank account number of the Company altogether
Form Spice+ Part A for name reservation, Spice+ Part B for incorporation application, Spice+ MOA for Memorandum of Association, Spice+AOA for Articles of Association, Agile pro for additional registrations, and Form INC-9 are the linked forms to be filed under this process.
There is no minimum paid-up capital prescribed as of now for private limited company registration.
The authorised capital is a maximum share capital of the company which sets limit within which the shares are issued by the company.
Paid-up capital is the shares issued by the company to its shareholders for raising capital but not exceeding the authorised capital.
No, it is not mandatory to have separate commercial office space as one can use a residential or rented home address as the registered office address of the company. After company registration, the registered office address can be changed and intimation can be made to ROC within 30 days.
ROC (Registrar of Companies) is an office under the Indian Ministry of Corporate Affairs which governs the entire activities of the Companies as per Companies Act 2013 and LLP as per Limited Liability Partnership Act 2008 and keeps a record of all changes by the companies as intimated from time to time.
There are currently 22 Registrars of Companies (ROC) operating from offices in all major states of India and some states like Maharashtra and Tamil Nadu, have two ROCs each. Every Company get registered under the respective ROC depending upon the state within which the registered office is located.
MOA (Memorandum of Association) and AOA (Article of Association) are the set of laws prepared in accordance with prescribed schedules under Companies Act and defines the objective and the purpose of the company is incorporated.
After company incorporation, a bank account is required to be opened in its name and the amount of paid-up share capital is to be deposited within two months of incorporation in that bank account, and e-form INC 20A with proof of deposit of subscription money is required to be filed within 180 days of incorporation with the ROC.
Yes, NRI can become director of the Company in India. The additional documents required apart from Indian director are
Copy of Passport duly attested by Consulate of Indian Embassy or Foreign Public Notary.
Copy of Driving License/Utility Bill/ Bank Statement duly attested by Consulate of Indian Embassy or Foreign Public Notary.
Director is a person who is appointed on the board to manage the business of the company. In contrast, the shareholder is the person who purchases the shares of the Company and provides the funds. So, the company can have the same person as the director as well as a shareholder or both the person can be separate.
No, the physical presence of directors and subscribers are not required for the company registration process.
The entire company registration process can be completed within seven working days depending upon the time taken by the registrar for approval of the application filed. If the forms don't get approved in the first application, then the time period for completing the process may get extended accordingly.
As per spice, DIN is allotted to a maximum of three directors through a single window of spice.
Further, the DSC of only two directors/subscribers is included in the package, and any addition will be charged additionally.