Private Limited Company Registration Online In India
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Private Limited Company Registration in India - An Overview
One of the most highly recommended methods for starting a business in India is to establish a private limited company, which provides its shareholders with limited liability while imposing certain ownership restrictions. When it is LLP, the partners will manage it. On the other hand, a private limited company allows for directors and shareholders to be separate entities.
We offer a cost-efficient service for registering your company in India. We handle all legal procedures and ensure compliance with the regulations set forth by the Ministry of Corporate Affairs (MCA). Upon successful completion of the private limited company registration process, we provide you with an Incorporation certificate (COI), as well as PAN and TAN documents. With these in hand, you can easily establish a current bank account and commence your business operations.
What is a Private Limited Company?
A Private Limited Company is one of the most common types of legal entity in India. Private Limited Companies are governed by the Companies Act, 2013 and require a minimum of 2 Directors and 2 Shareholders with one of the Directors being an Indian Resident and Indian Citizen.
To register a company in India, the following are minimum requirements:
- 2 Directors – 1 Person should be an Indian National and Indian Resident
- 2 Shareholders – The Directors can be shareholders
- Registered Office in India
100% Foreign Direct Ownership (FDI) is permitted in most sectors in India and there is no restriction on foreign shareholding of a private limited company. Hence, most foreign subsidiaries are established in India as private limited company.
Benefits of Private Limited Company Registration
The following are the major benefits of incorporating a private limited company in India versus other entity types.
Separate Legal Entity
A company is both a legal entity and a juristic person. Therefore, a company has broad legal rights to like acquiring property, incurring debts, hiring people, etc. As a company is a separate legal entity, the company’s members (shareholders or directors) are not personally liable for the company’s liability.
Limited Liability
A private limited company is a separate legal entity with limited liability provisions. Therefore, the shareholders are not liable for the losses of the company – for an amount more than what was invested by them into the company as share capital.
Uninterrupted Existence
A company has ‘perpetual succession,’ which means it will continue to exist until it is legally dissolved. Because a company is a separate legal entity, it is unaffected by the death or other departure of any of its members, and it continues to exist regardless of membership changes.
Fund Raising
A private limited company has multiple options for fundraising. A company can raise funds from shareholders, investors, angels, venture capital funds, private equity funds, foreign funds, NBFCs, banks and other financial institutions. Only a company can raise debt and equity funds from investors.
Potential to grow
A private limited company is considered to be more trustworthy form of business entity compared to other forms i.e. sole-proprietorship or partnership business as company accounts need to be audited every financial year which provides more security to its investors, lenders, suppliers and customers. Therefore, a private limited company has more potential to grow and expand as other entities finds it more secure to do business with a private limited company.
While there are many benefits of registering a private limited company, registering a company may not be ideal for all entrepreneurs as a company has to mandatorily maintain various compliances irrespective of business turnover or activity. Hence, operating a company involves a minimum recurring cost each year to meet the statutory compliance in India.
What are the Steps For Private Limited Company Registration in India?
Startups in India can gain an edge over non-registered competitors by registering their company. While the process of registration is getting complicated and involves numerous compliance requirements, need not worry as we are here to assist you every step of the way of company incorporation though MCA.GOV.IN. Our team of professionals can provide comprehensive support for private limited company registration.
RUN Name Approval
An application for company name approval is first submitted to the Ministry of Corporate Affairs to reserve the company name. In the name approval application, 1 or 2 names with business objectives can be submitted. If a name approval is rejected, 1 or 2 more names can be resubmitted. Normally, the MCA approves all name approval applications in less than 5 working days.
Digital Signature for Directors(DSC)
All signatures for filings with the MCA must be completed with a digital signature that is issued by a Certification Authority in India. Hence, digital signatures are mandatorily required for the Directors before incorporation.
Digital signature for the Directors will be obtained through an Authorized Certifying Authority by our team. To obtain Digital Signature, the Directors will have to submit a copy of their identity proof and complete a video KYC process. If the Director is a foreign national, the passport and other documents submitted must be apostilled by a local embassy.
Incorporation Application Submission
Once the digital signatures are obtained, the incorporation application can be filed in SPICe Form to the MCA with all relevant attachments. Along with the incorporation application, the Memorandum of Association (MOA) and Articles of Association (AOA) of the company are filed. If the MCA finds the incorporation application to be complete and acceptable, the Incorporation Certificate is granted along with PAN of the company. The MCA normally accepts all incorporation applications in less than 5 working days.
What are the Statutory Compliances for Private Limited Company?
Private Limited Company is a legal entity and various compliances must be maintained to avoid penalties and prosecution. The following are some of the compliances a company would be required to complete after company registration:
Auditor Appointment
All companies registered in India must appoint a practicing and licensed Chartered Accountant registered with the ICAI within 30 days of incorporation. Audit of Financial statements for each financial year is a statutory requirement.
Director DIN KYC
All persons who hold a Director Identification Number (DIN) – which is allocated during the incorporation process must complete DIN KYC each year to validate the phone and email address on record with the Ministry of Corporate Affairs.
Commencement of Business
Within 180 days of incorporation, the company must open a Bank Current Account and the shareholders must deposit the subscription amount mentioned in the MOA of the company. Hence, if the company was to be incorporated with a paid-up capital of Rs. 1 lakh, then the shareholders must deposit Rs. 1 lakh in the Company’s bank account and file the bank statement with the MCA to obtain a commencement of business certificate.
MCA Annual Filings
All companies registered in India must file a copy of the financial statements with the Ministry of Corporate Affairs each financial year.
Income Tax Filing
All companies must file an income tax return using Form ITR-6 each financial year. Income tax filing must be done for each financial year before the due date – irrespective of the incorporation date. The income tax return of a company must be digitally signed using one of the Director’s digital signature.
What is the Cost involved in Private Limited Company Registration?
Description | Amount |
|---|---|
DIN | ₹ 2,000 |
DSC | ₹ 1,000 |
Professional Fees(Our Fees) | ₹ 3,500 |
Stamp Duty (Approximately) | ₹ 2,000 |
Notary Fees | ₹ 500 |
Govt Fees (PAN,TAN,RUN) | ₹ 1,000 |
All Inclusive Total Cost | ₹ 10,000 |