Private Limited Company Registration

As per Section 2(68) of Companies Act, 2013, private companies are those companies whose articles of association restrict the transferability of shares and prevent the public at large from subscribing to them. This is the basic criterion that differentiates private companies from public companies.

Minimum number of 2 shareholders are needed to form a private company, whereas the Private companies can have a maximum of 200 members (except for One Person Companies). This number does not include present and former employees who are also members. Moreover, more than two persons who own shares jointly are treated as a single member. To register as a Private Limited Company, only 2 directors are required initially, and the maximum limit can go up to 15 directors. Minimum age of 18 years is needed to get appointed in a company as directors. In India, a foreign national is also eligible to become a director in a Private Limited Company.

There is no such requirement for any minimum paid-up capital for a Private Limited Company registration and it should add "PVT. LTD." at the end of their name.

Outlook of Private Limited Company Registration

Several problems that conventional business models failed to address were brought about by the expansion of trade and commerce. For instance, people formed partnerships because of the sole proprietorship's unlimited liability features, however even this proved to be ineffective and risky. The concept of companies emerged at this time, and the oldest example of this is the private company structure. Private Limited Company is the independent venture, which is the one of the most prevalent means of starting business in India. They are administered in India as per The Companies Act, 2013.

A Private Limited Company always experiences a longer existence. Even if one of its members dies or goes bankrupt, the business continues to exist. In case, a Private Limited Company had to face any sort of financial crisis, its investors are not subjected to sell off their own assets. A Private Limited Company doesn't have any relationship with the public; they are not allowed to request for any investment from people in general or public sectors. Members are not allowed to transfer shares which shield takeovers of Private Limited Company from enormous undertakings.

Types of Private Companies

Private companies are of three types depending on their members’ liabilities:

1. Limited by shares: The liability of the members is limited to the amount unpaid to the company with respect to the shares held by them.
2. Limited by guarantee: Here the members’ liabilities are limited to the amount of money they guarantee to pay in case the company is wound-up.
3. Unlimited liability: The liability of members is unlimited in this type of private companies. Personal assets of members can be attached and sold when the company is being wound-up.

In terms of the number of members, a private company can also be a One Person Company. These types of companies have just one member/shareholder as their promoter as per T Companies Act, 2013.

Some Benefits of Private Limited Company

There are immense benefits for a company registered as a Private Limited Company. These are:

●      Limitation of Liability - The obligation of the members of a Private Limited Company is limited to their share as it is a different lawful entity.

●      Availability of Credit- Debentures and investors can both provide capital to a Private Limited Company. A registered Private Limited Company is considered as a 'corporate entity' that draws in different private investors and financial speculators that assists them with extending and generating funds for the development of their business.

●      Separate Legal Entity - A Private Limited Company is a separate legal entity with full legal standing to sue or to be sued. It takes on the role of an imaginary person who can purchase real estate in its own name.

●      Interminable Existence- A Private Limited Company can exist indefinitely. They are an independent legitimate entity that exists independently of their owners. It implies that a company cannot get dissolved for insanity, death or retirement of any one of the directors, members or shareholders.

●      Performs Globally- Other types of businesses require licencing and clearance from the administration for foreign investments whereas a Private Limited Company upholds Foreign Direct Investment.

●      Increased Market Value- In comparison to non-registered Private Limited Companies, registered ones are more reliable. The Ministry of Corporate Affairs' website provides easy access to information about registering as a Private Limited Company. They are trusted more by suppliers, vendors and investors over other company models. Therefore, it increases the value of the company to the customers and other investors too.

●      Simplicity in Transferring Ownership- It is easier to transfer the ownership or equity to another person or member in a private company.

Necessary Documents for Private Limited Company Registration in India (By SPICe+ form)

Some necessary documents required to register as Private Limited Company in India are-

From all Directors and Shareholders.

• PAN Card
• Aadhar Card
• Latest Bank Statement/Telephone or Mobile Bill
• Passport, if Available
• Voter's ID/Driver's License (optional)
• Director’s interest in other entity (if applicable)
• Passport-sized photograph of all directors and shareholder
• Scan copy of Signature (signature should same as on PAN Card)

For Proposed Registered Office 

• Any Utility bills (Latest) as Ownership Proof.
• Scan Copy of Sale Deed, if the property is self-owned.
• Scan copy of Rent agreement / NOC from owner, if the property is rented.

SPICe+ form Services

The following is a list of services that the Online Company Incorporation Form will provide, also known as the SPICe+ form-

●      Profession Tax Registration (Only for Maharashtra)

●      Registration of ESIC for the Company

●      Company's Registration with EPFO

●      Opening of Bank Account

●      Allotment of TAN

●      Company's Incorporation Certificate

●      Issue of PAN for the Company

●      Registration of the company in GST as taxpayer.

●      Allotment of Director Identification Number (DIN)

Process for Online Registration of a Company as Private Limited Company

The new SPICe+ form is timesaving and has been consolidated for all the new companies. SPICe+AoA, SPICe+MoA and AGILE-PRO are also required to be filed with SPICe+. The process is grouped into two parts-

●      Part- A

Reservation of name (Only for New Companies)

●      Part- B

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 fulfils 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. 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.

NOTE: If due to any processing issues the form is mark for resubmission, complete the issues mark in the resubmission remarks, after that SPICe+ form must be resubmitted in the similar manner.

Formalities by Private Limited Companies

●      Name board- Companies are needed to attach its name and area/location of its registered office outside every office.

●      Letterhead - On all receipts, announcements and other official records of the Company, the name, CIN and registered office address of the Company must be printed.

●      Legal register- All organizations need to keep a legal register for the Company containing data such as, list of board of directors, charges, register of members debentures and other necessary information regarding the Company’s investors and administration

●      Agreement Of Auditor - For ensuring the organization fuses, it requires the Board of Directors to assign the primary evaluator of the Company, a Chartered Accountant in 30 days of joining.

●      Certificates of Shares- Companies need to establish address share certificates to the shareholders within two months of the accomplishment.

Post Incorporation Compliances by Private Limited Companies

Once you get the Certificate of Incorporation, a separate legal entity for the Company is established. Outlined below are the key compliance tasks that need to be followed after incorporation

1. Board Meetings:

·       Conduct the first board meeting within 30 days of incorporation.

·       Hold at least four board meetings every year, ensuring that the gap between two meetings does not exceed 120 days.

2. Issuance of Share Certificates:

·       Issue share certificates to the subscribers of the memorandum within 60 days from the date of incorporation.

3. Statutory Registers:

·       Maintain the statutory registers at the registered office, including the Register of Members, Register of Directors and Key Managerial Personnel, and Register of Charges.

4. Appointment of Auditor:

·       Appoint the first auditor of the company within 30 days of incorporation. The appointment should be ratified at the first annual general meeting (AGM).

5. Filing of Form INC-20A (Commencement of Business Certificate):

·       File Form INC-20A within 180 days from the date of incorporation. This form declares that the company has received the subscription money from the shareholders.

6. Goods and Services Tax (GST) Registration:

·       If applicable, obtain GST registration within 30 days of incorporation to avoid penalties.

7. Employee Provident Fund (EPF) and Employee State Insurance (ESI) Registration:

·       Register for EPF and ESI if the number of employees exceeds the specified threshold limits.

8. Professional Tax Registration:

·       Obtain professional tax registration as per the State regulations where the company is registered (If Applicable).

9. Shop and Establishment Act Registration:

·       Register under the Shop and Establishment Act as per the local state laws.

10. Annual Compliance Filings:

·       Preparation and filing of annual returns with the Registrar of Companies (ROC).

·       Conduct the annual general meeting (AGM) within six months from the end of the financial year.

·       Filing of financial statements and other necessary documents with the ROC.

·       DIR-3 KYC to be filed with ROC every financial year for Director’s DIN till 30^th September.

11. Income Tax Compliance:

·       Ensure timely payment of advance tax, TDS/TCS returns, and other statutory payments.

12. Other Industry-Specific Compliances:

·       Ensure adherence to any industry-specific compliances and licenses required for the operation of your business.

Post Incorporation Compliances by Private Limited Companies

Once you get the Certificate of Incorporation, a separate legal entity for the Company is established. Outlined below are the key compliance tasks that need to be followed after incorporation

1. Board Meetings:

·       Conduct the first board meeting within 30 days of incorporation.

·       Hold at least four board meetings every year, ensuring that the gap between two meetings does not exceed 120 days.

2. Issuance of Share Certificates:

·       Issue share certificates to the subscribers of the memorandum within 60 days from the date of incorporation.

3. Statutory Registers:

·       Maintain the statutory registers at the registered office, including the Register of Members, Register of Directors and Key Managerial Personnel, and Register of Charges.

4. Appointment of Auditor:

·       Appoint the first auditor of the company within 30 days of incorporation. The appointment should be ratified at the first annual general meeting (AGM).

5. Filing of Form INC-20A (Commencement of Business Certificate):

·       File Form INC-20A within 180 days from the date of incorporation. This form declares that the company has received the subscription money from the shareholders.

6. Goods and Services Tax (GST) Registration:

·       If applicable, obtain GST registration within 30 days of incorporation to avoid penalties.

7. Employee Provident Fund (EPF) and Employee State Insurance (ESI) Registration:

·       Register for EPF and ESI if the number of employees exceeds the specified threshold limits.

8. Professional Tax Registration:

·       Obtain professional tax registration as per the State regulations where the company is registered (If Applicable).

9. Shop and Establishment Act Registration:

·       Register under the Shop and Establishment Act as per the local state laws.

10. Annual Compliance Filings:

·       Preparation and filing of annual returns with the Registrar of Companies (ROC).

·       Conduct the annual general meeting (AGM) within six months from the end of the financial year.

·       Filing of financial statements and other necessary documents with the ROC.

·       DIR-3 KYC to be filed with ROC every financial year for Director’s DIN till 30^th September.

11. Income Tax Compliance:

·       Ensure timely payment of advance tax, TDS/TCS returns, and other statutory payments.

12. Other Industry-Specific Compliances:

·       Ensure adherence to any industry-specific compliances and licenses required for the operation of your business.