Private Limited Company Registration

Private limited company registration is the most prominent form of business entity. Companies incorporated under the Companies Act, 2013 have a separate legal entity, perpetual existence, higher credibility and limited liability.

For registering a company under the Companies Act, 2013, it needs to be registered with the registrar of companies as per the given guidelines and rules laid down by the Ministry of Corporate Affairs (MCA).

The basic requirements for a private company are the number of shareholders, the number of directors, the requirement of an Indian Resident director, an eligible name according to the Name approval guidelines, a registered office address, the requirement of capital and necessary documents for registration.

Procedure of Private Limited Company Registration

The registration process of a private limited company in India is given in the following steps

1. Applying for Digital Signature (DSC)

The proposed directors and shareholders are required to apply for a valid digital signature certificate from a certified agent approved by the Controller of certification agencies.

2. Obtaining Director Identification Number for Director (DIN)

The proposed director has to apply for DSC as they are required to file Form DIR-3 and apply for a unique Director Identification Number. The application must be approved by the registrar of companies and grant the distinctive DIN to the proposed director.

3. Application for i.e., Name Reservation of the Company

First of all, check the availability of the name on the official MCA portal. The name reservation of the private limited company registration name availability by RUN services on the MCA portal.

The unique name of the company must be as per the name guidelines issued by MCA. Every company must include a word that denotes the activity undertaken.

4. Drafting of MOA and AOA

The memorandum of association is the constitution of the company which defines the objectives carried out by the company. The articles of association of the company provide the internal rules for the management of the company.

The MOA has a name clause, registered office clause, object clause, liability clause, capital clause and subscriber clause.

Table F provides details regarding the articles of association. It defines the power and responsibility of the director for Private limited company registration, management decisions, transfer of shares, dividend policy, and other important details related to the company.

5. The SPICe+ form is divided into two parts:

Part- A of SPICe+ Form:

Name reservation with two proposed names. The applicant can also apply for two proposed names. The SPICe+ Form Part- A consists of the following fields:

Type of company:

Select ‘Private limited company’ from different types of the company listed in the form

Class of company:

This signifies whether a company is public, private or one person.

Category of the company:

It includes a company limited by shares, by guarantee or unlimited shares. The most popular category is a company limited by shares

A sub-category of the Private limited company registration process:

Choose the relevant sub-category with the advice of a professional.

The main division of industrial activity:

Choose the one that is appropriate for your business.

Description of main division:

Specify the objective and purpose of the company in a detailed manner.

Proposed name of the company:

One can apply for two proposed names at one time. The MCA website can take 2-3 working days to approve the Part A of the SPICe+ form. One can also check if a company name with a similar name is already registered or not on the MCA portal before filing the SPICe+ form.

Part- B of SPICe+ Form:

The applicant must provide Private limited company registration online in Part- B of the SPICe+ form for the following purposes as given below:

• Capital details
• Registered office details
• Subscribers' and directors’ details
• Application of EPFO and ESIC registration
• Application for DIN
• Application for PAN and TAN
• Attachments
• Declaration
• Allotment of GSTIN (Goods and services tax registration number). It is not mandatory for a company to be registered under the GST unless the prescribed limit of turnover is crossed.

Once Part A is approved, the details automatically get pre-filled in Part- B in all linked forms such as AGILE-PRO, e-MOA, e-AOA, URC-1 and INC-9.

6. Mandatory Attachment With Documents Required

• Directors' and Subscribers' KYC documents such as Aadhar cards, PAN cards, Proof of address, passport size photo, etc.
• Director consent in form DIR-2
• Registered address proof. E.g., Rent agreement or NOC.

7. Approval

Once the Company registration is completed through the SPICe+ form, a Certificate of Incorporation is issued along with the Company Identification Number (CIN), PAN and TAN of the company with the sign and seal of the registrar. It is conclusive proof of the existence of the company with the date of incorporation.

8. Opening of Current Bank Account On Company Name

The last step for Online Company Registration in India after receiving the certificate of incorporation is to open a current bank account. The bank account is opened in the name of the company within 180 days and the subscription amount must be deposited.

Documents Required for Private Limited Company Registration

The Pvt ltd company registration documents are mentioned-below as follows:

1. Identity Proof of Directors & Shareholders

• PAN card for Indian nationals
• Passport for foreigners
• Proof of nationality for foreigners
• Identity Proof can be either a Voter ID or Passport or Driving license
• Board Resolution passed by the company for authorization of director.
• Two passport-size photographs of the proposed directors

2. Address Proof of Directors & Shareholders

• Bank statement or an Electricity bill for anyone that is not older than two months

3. Proof of Registered Office

• Rent Agreement/Lease deed etc. along with rent receipts
• Copy of the utility bills such as telephone, gas, electricity, etc. must not be more than two months older.
• NOC from the owner

4. Other Documents

• DSC form

Private limited company registration for foreign nationals is similar to the incorporation process as discussed above.

The documents required by foreign nationals are:

• Passport and
• Address proof like driving license or bank statement or utility bill.

The documents required by foreign residents residing in India are:

• Resident Permit
• Passport
• Business Visa
• Bank statement or any utility

All the given documents must be attested by the Consulate of the foreign embassy.

Annual Compliances for a Private Limited Company

Every Private limited company shall adhere to given yearly compliances applicable from time to time. The post-incorporation compliances are listed below:

Board Meetings:

The first board meeting of Private limited company registration must be held within 30 days of the incorporation of the company. A private company should conduct a minimum of two board meetings annually.

Filing of Acknowledgment of Interest by directors:

Every director at -

1. The first meeting in which he engages as director; or
2. The first meeting of the board in each financial year; or
3. Whenever there are a number of disclosures that must be given in Form MBP-1 (along with a list of relatives in the company as per related party transaction), his interest in any company, body corporate, firms including shareholding interest.

First Auditor:

The board of directors shall appoint the first auditor of the company within 30 days of Private limited company registration, who shall continue the office till the completion of the first Annual general meeting. The filling of Form ADT-1 is not mandatory in the case of first auditors

Subsequent Auditor:

The Board of directors shall delegate the auditor in the first annual general meeting of the company who shall hold the position until the sixth annual general meeting with notification to the ROC by filing Form ADT-1. The capacity to submit Form ADT-1 is of the company and not the auditor within 15 days from the time of appointment.

Annual General Meeting:

It is mandatory to hold an Annual general meeting on or before 30th September every year on working days and hours. It should not be a national holiday or general public holiday. A twenty-one days’ notice is required to be given.

Filing of Annual Returns:

Every Private limited company registration has to file its annual return within 60 days of conducting the annual general meeting.

Filing of Financial statements:

Every Private limited company has to file its ‘Balance sheet’ with a ‘Profit and loss account’ and ‘Director’s report’ in Form AOC-4 within 30 days of holding an annual general meeting.

Statutory Audit of Accounts:

The company must prepare its accounts and get the audit by a qualified Chartered Accountant at the end of the financial year.

Income Tax Returns:

Every private company must file the Income tax return by the end of September i.e., 30th September of each year for the income earned in the previous financial year.

GST Returns

To be filled every month

Other Event based compliances are changes in the registered office, changes in directors or KMP, Increase in authorized capital, filing of resolution and agreements in MGT-14, Increase in paid-up share capital, change in borrowing or creation of charge, Application for KYC of directors and declaration of commencement of business.

Advantages of Private Limited Company Registration

The benefits of company registration private limited in India are as follows:

1. Limited Liability

This means that the shareholders are liable to pay for the company’s liability only to the extent of the contribution made by them.

2. Separate Legal Entity

The company is only responsible for the management of assets and liabilities and debtors and creditors.

3. Raising Capital

The company can also raise funds from various investors because it gains the benefit of limited liability. A company can raise funds from shareholders, investors, venture capital funds, private equity funds, foreign funds, NBFCs, banks and other financial institutions.

4. Perpetual Succession

The Private limited company registration has continued or uninterrupted existence until it is legally dissolved. It is unaffected by the death or resignation of any of its members or directors and continues to exist regardless of membership changes.

5. Tax Saving

Corporate tax rates are less as compared to income tax rates. The company can choose to pay dividends to its shareholders instead of the usual salaries, as its lesser tax reductions.

6. Exit Strategy

The members can also sell their ownership or shares in an organization to investors or another company.

7. Management and Ownership Separation

The company and management can focus on their potential work. The shareholders must assign responsibility to operate and smooth-running of the company without losing control in the way of voting.

Private Limited Company Registration Fees

The registration of the company by an online platform of the Ministry of corporate affairs (MCA). The government fees for registration for the company are based on the calculation of the capital of the company. The members starting a private ltd company can apply for

• Company name checked
• Company incorporation
• DIN and DSC of the directors
• PAN for the company
• TAN for the company
• MOA and AOA drafting
• Company Identification Number (CIN

The applicant can get these seven services simultaneously. The registration fees for Private limited companies have been waived by the Government in the year 2019. The minimum capital is not required for forming a company.

The cost of registration is comparatively lower after the introduction of the scheme of starting a business easier in India

However, the private limited company registration fees in India will vary depending on the state and authorized capital with which it is being registered.