Private Limited Company

Advantages

Limited Liability Protection
to Director’s personal assets
Better image & credibility in Market
Easy to raise funds and loans
Best Mode for Startup Ventures
Favorite Business structure for Investors

Minimum Requirements

Minimum Two Directors
Minimum Two Members
No Minimum Capital Required
Maximum Fifteen Directors
One Director shall be Indian resident

Introduction

A Private Limited Company is the most relevant and caught on type of business structure in India, suitable for small and medium scale businesses. However, the total number of members in Private Limited companies cannot exceed the maximum limit of 200.

Once the registration of such companies is done, a separate legal existence is attained by a business organization which means a registration gives a business – an individual legal identity independent of the company’s directors and shareholders. This implies the continuation of the company’s existence even after the death of any member of the company. This makes the registration of a Private Limited company as an important job. For Private Limited company registration, one must go to professionals or visit MCA online portal.

Companies Act, 2013 lays down the law for Private Limited companies and the Ministry of Corporate Affairs is the regulatory body for the registration of these companies.

Reasons to Register a Private Limited Company

Easy Transferability

Limited Liability

Perpetual succession

Improves credibility

Requirements for Incorporation of a Private Limited Company

Companies Act, 2013 has listed the following requirements for the incorporation of a Pvt. Ltd. company

Minimum 2 Directors

Note– One Director must be Indian Resident

PAN Card

Self-attested PAN Card of Members and Directors.

Identity Proof of Directors

Self-attested ID proof of Members and Directors- (Anyone out of the following -Valid Passport/Voter ID/Aadhar Card/Valid Driving License)

Address Proof

Self attested Address proof of the Members and Directors (Any one out of the following - Bank Statement/ Electricity Bill/ Telephone Bill/ Mobile Bill which and it should be not older than 2 months

Business Address Proof (Rented/Leased)

If proposed Registered Office is taken on Lease – NOC from Landlord/Lease Agreement/Utility Bill (Either Electricity Bill or Mobile Bill or Telephone Bill) (Should Not be Older than 2 Months)

Business Address Proof (Owned)

If the proposed Registered Office is not taken on Lease – NOC from the Owner of Property/Property Papers (Title Deed)/Utility Bill (Either Electricity Bill or Mobile Bill or Telephone Bill) (Should Not be Older than 2 Months)

Basic Information Required

Authorized and Paid-up Share Capital of the Proposed Company and Number of Shares Subscribed by Members. Explanation: A Company can be commenced with any amount of capital. There is no need for a minimum capital amount of Rs.100,000.
Place of Birth and Duration of Stay of Members and Directors at Present Residential Address.
Occupation of Members and Directors.
Proposed Object/Business of the Proposed Company.
Educational Qualification of Members and Directors.
Email IDs and Contact Number of Members and Directors.

Process of Registration

The Ministry of Corporate Affairs vide its notification dated 18th February 2020 effective from 23rd February 2020 has further amended the Companies (Incorporation) Rules, 2014 thereby substituting the old Form INC-32 (SPICe) with web service SPICe+ along with certain other amendments.

1. An application for Name Reservation

The first step is to make an application for reservation of name which shall be reserved by using the web services (SPICe+) available at www.mca.gov.in along with the specified fees. Before Applying for the name, kindly check that the name is available on MCA as well as no trademark. Is there no such name under the Class of work you are going to apply.
The new integrated form consists of two parts i.e. PART A and Part B. The Name(s) of a company can be reserved in Part A of SPICe+. In case the applicant wants to apply for name, incorporation, and other integrated services together, he can do so together by filling necessary information in Part A and Part B.

2. Fill Part B of SPICe+

The second step is to fill the Part B of SPICe+ for registering the Company. The said form contains various sections that allow you to save and modify information if required.The new integrated form consists of two parts i.e. PART A and Part B. The Name(s) of a company can be reserved in Part A of SPICe+. In case the applicant wants to apply for name, incorporation, and other integrated services together, he can do so together by filling necessary information in Part A and Part B.

3. Convert SPICe+ Form into PDF

The third step is to convert the SPICe+ form into a pdf form in order to affix the DSC.

4. Upload the form on MCA

After affixing the DSC the form is required to upload on the Ministry of Corporate Affairs in accordance with the existing process.

5. Declare the company’s Subscribers & First Directors

Declaration of all Subscribers and first Directors of the company which is currently being filed in Form INC-9 will be automatically generated in pdf format and shall be submitted only through Electronic form in all cases, except in case:
a) The no. of subscribers and/or directors is more than 20.
b) Any of the subscribers and/or directors do not have DIN and PAN

Changes As Per The Amendments Introduced Recently

No need to mention SRN

There is no need to mention SRN for names reserved in Part A of SPICE+ as the same will be automatically displayed while filing Part B after filing of Part A.

Mandatory Registration for ESIC and EPFO

Registration for ESIC and EPFO has been made mandatory for all new companies that are incorporated w.e.f 23rd February 2020.

Mandatory Registration for Profession Tax

Registration for Profession Tax is made mandatory for all new companies incorporated in Maharashtra state, w.e.f. 23rd February 2020.

Mandatory Application for opening a bank account

Application for opening of a bank account is made mandatory for all new companies incorporated w.e.f 23rd February 2020 the same application shall be filed through the AGILE-PRO linked web form.

Declaration of Company’s Subscribers and First Directors in PDF form & e-submission

Declaration of all Subscribers and First Directors of the Company which is currently being filed in Form INC-9 will be automatically generated in pdf format and shall be submitted only through Electronic form in all cases, except in case:
a. No. of subscribers and/or directors is more than 20.
b. Any of the subscribers and/or directors don’t have DIN and PAN.

Mandatory Use of e-MoA(INC-33) & e-AoA(INC-34)

It is mandatory to use e-MoA (INC-33) and e-AoA (INC-34) in case the number of subscribers is up to 7 and in the following scenarios:

Individual subscribers are Indian nationals

individual subscribers who are foreign nationals only in case they valid DIN and DSC and also submit proof of a valid business visa

Non-individual subscribers based in India.

Physical copies of MoA/AoA must be signed and attached if in case non-individual first subscribers are based outside India or individual foreign subscribers do not possess a valid business visa or any other scenario which are as follow:

S. No.	Cases	Forms to be filed
1.	Non-Individual first subscriber based outside India	SPICe+ (INC-32) with apostille MOA and AOA as attachments
2.	Non-Individual first subscriber based in India	SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34)
3.	Indian National being Subscriber other than Director	SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34)
4.	Indian National being Subscriber-cum-Director	SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34)
5.	Foreign National being Subscriber other than director having valid DIN	SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34) along with Valid Business Visa to be submitted. In case Business Visa is not available, apostille MOA and AOA shall be attached and in such cases, e-MOA (INC33) and eAOA (INC-34) are NOT acceptable.
6.	Foreign National being Subscriber-cum-Director having valid DIN	SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34) along with valid Business Visa to be submitted. In case Business Visa is not available, apostille MOA and AOA shall be attached and in such cases, e-MOA (INC33) and e-AOA (INC-34) are NOT acceptable.
7.	Foreign National being Subscriber-cum-Director not having valid DIN	SPICe+ (INC-32) with apostille MOA and apostille AOA as attachments.

In all the above-mentioned cases, the maximum number of subscribers allowed shall be 7 for filing of SPICe+ form. Wherever the number of subscribers exceeds 7, SPICe+ form shall be filed with MoA and AoA as attachments.

Filing of Statutory Return

Companies newly incorporated through SPICE+ and who have obtained EPFO/ESI number will have to file Statutory Return only if the prescribed threshold limit has been exceeded.

December 1, 2021 6:51 am

GST Rate changes from 1 Jan 2022 vide Notification No . 14,15,16&17/2021 dated 18.11.2021

November 28, 2021 6:59 am

FAQs on Private Limited Company

Does for the small business, the Private Limited Company registration will be benefited?

Yes, for small business it is preferable to register under private limited company registration in India. It provides them the credibility and a image of their business in the eye of financial institution, suppliers & potential clients. It helps the company in obtaining the loans at little compliance from the banks or potential clients while entering into any deal.

For how long a name a approved name is valid?

An approved name shall be valid for a period of 20 days from the date of approval of such name

How many Directors and Members are required to form a Private Limited Company?

A private limited company must have minimum 2 directors and can have a maximum of 15 directors and a minimum of 2 shareholders are required maximum number of shareholders is 200.

Whether a Director or a Shareholder be the same?

Yes, a person can become a Director as well as a shareholder and vice versa as a Company is a Separate Legal Entity.

What are the minimum capital requirement for forming a Private Limited Company ?

As per Companies Act, 2013 there is no minimum capital required for incorporating a Private Limited Company but generally people prefer and advised to incorporate the same with a minimum capital of INR. 1 Lacs.

Can a NRI or a Foreign National be a Director or Shareholder of a Company?

Yes, a NRI or a Foreign National can become a shareholder and Director (post obtaining the Director Identification Number). However one Director of the Company should be Indian Resident.

In how much time the subscription money is to be deposited?

A Member who has agreed to subscribe the shares shall be required to deposit the money in the bank account at the earliest and shall file a form for commencement within 180 days from the date of incorporation of the Company.

Can the amount deposited above be withdrawn from the Bank Account?

No, the money deposited cannot be withdrawn but the same can be used by the Company for its official purpose like for paying salary to staff members and employees, other administrative expenses etc.

Can a Private Limited Company carry multiple business under one style of name?

Yes, a Private Limited Company can carry on multiple related business activities if the same is mentioned in the company’s objects which must be approved by the registrar. one cannot operate entirely different business activities like construction and the food company under one name but related activities can be performed.

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December 1, 2021

GST Rate changes from 1 Jan 2022

November 28, 2021