How to register a Private Limited Company in India?
What is a private limited company?A private limited company is a type of business entity in India that is privately held, meaning it is not owned by the government or by shareholders. This type of company is limited by shares, which means that the liability of its members is limited to the amount of money they have invested in the company. Private limited companies must have at least two shareholders and a maximum of fifty shareholders. These shareholders can be either individuals or corporate entities. The shares of a private limited company cannot be offered to the public.
Private limited companies are required to file their financial statements with the Registrar of Companies (ROC). They are also required to obtain a Certificate of Incorporation from the ROC. After incorporation, a private limited company must obtain a Company PAN from the Income Tax Department and open a bank account in the name of the company. The minimum paid-up capital for a private limited company is Rs. 1 lakh (100,000).
Advantages of a private limited companyA private limited company is a business entity that is owned by shareholders. The liability of the shareholders is limited to their investment in the company. A private limited company is a separate legal entity from its shareholders. This means that the shareholders are not personally liable for the debts of the company. Find out more about Accounting Services in Bangalore
A private limited company has certain advantages over other business entities such as sole proprietorships and partnerships. These advantages include:
- Limited liability: As mentioned above, the liability of the shareholders is limited to their investment in the company. This protects them from being held liable for any debts or losses incurred by the company.
- Separate legal entity: A private limited company is a separate legal entity from its shareholders. This means that the assets and liabilities of the company are separate from those of the shareholders. This provides protection to the shareholders from being held liable for any debts or losses incurred by the company.
- Easy to raise capital: A private limited company can easily raise capital by issuing shares to investors. This is because a private limited company has a larger pool of potential investors compared to other business entities such as sole proprietorships and partnerships.
- Professional management: A private limited company can appoint professional managers to run its operations. This ensures that the business is run efficiently and effectively.
- Perpetual succession: A private limited company has perpetual succession, which means that it continues to exist even if one or more of its shareholder.
Steps to register a private limited company in IndiaThe first step is to obtain a Director Identification Number (DIN) and a Digital Signature Certificate (DSC). These can be applied for online through the Ministry of Corporate Affairs (MCA) website.
Next, you will need to select a name for your company. The name must end with “Private Limited” or “Pvt. Ltd.” and should not be identical to any existing company name. Once you have selected a name, you will need to apply for a Certificate of Incorporation from the MCA.
The final step is to file various documents with the Registrar of Companies (ROC), including the Memorandum and Articles of Association, Form INC-7 (Notice of appointment of directors), and Form DIR-12 (Declaration of compliance with the Companies Act).
Documents required for registration
- Documents required for registration
- Application form INC-29
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Proof of identity and address of directors
- PAN Card
- Incorporation certificate
The process of registrationThe registration process for a private limited company in India is a simple and straightforward process. The first step is to obtain the required documents from the Registrar of Companies (ROC). These documents include the Memorandum of Association (MOA) and Articles of Association (AOA).
Next, you will need to file an application for incorporation with the ROC. Once your application has been approved, you will receive a Certificate of Incorporation. This document serves as proof that your company has been legally registered with the ROC.
After you have received your Certificate of Incorporation, you will need to open a bank account in the name of your company. You will also need to apply for a business license from the local authorities. Once you have obtained all of these documents, you will be able to start operating your business.
Fees involved in registrationWhen it comes to registering a private limited company in India, there are several fees involved. The first fee is the filing fee, which is paid to the Registrar of Companies. The filing fee for the incorporation of a private limited company is INR 1,000.
The second fee is the registration fee, which is paid to the Ministry of Corporate Affairs. The registration fee for the incorporation of a private limited company is INR 5,000.
The third and final fee is the stamp duty, which is paid to the respective state governments. The stamp duty for the incorporation of a private limited company varies from state to state.
After registration – what next?After registration, the next step is to obtain a certificate of incorporation from the Registrar of Companies. This certificate is evidence that your company has been registered and is now a legal entity. Once you have the certificate, you can start opening bank accounts, hiring employees, and doing business.
Company secretary in bangaloreour team of company secretary in bangalore will assist you end to end in the process of registering your company. We are here to guide you through all the aspects of registering a private limited company and see to it that that you get the best services throughout the entire process.
ConclusionWe hope this guide provided an overview on how to register a private limited company in India. We understand that the process may seem daunting at first, but with the right guidance and knowledge, you can go through it without any hassles. There are many benefits associated with having a private limited company such as tax exemptions and procedural ease. Therefore, we recommend that you seriously consider registering your business in India today!
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