If you are looking to start a business, the private limited company registration is the first step you need to take. This process can be complicated, but with the help of an experienced attorney, you can ensure that your company is set up the right way.
"Private Company" means an 8[company having a minimum paid-up share capital 4[Omitted] as may be prescribed, and which by its articles, —
However, if two or more people own the same number of shares in a corporation, they will be considered a single member for the purposes of this provision.
In simple terms, a private limited company is a company that the small stakeholders privately hold. The shares of the company are not for the general public.
The business gets recognized as a company going to have a certification of private limited company registration when registered under the Companies Act, 2013.
It's a Private "Limited" Company in which limited means the financial responsibility of the stakeholders of the company, and that is limited to the value of shares held and the amount which have not been paid for.
With the emerging trend of start-ups, more and more people are starting their businesses, so the registration of a private limited company is a suitable option because of its limited liability.
1.No Minimum Capital Required for One Person Company Registration in India :
Earlier, there was a minimum capital required to start a private company, but this condition was waived off by the Companies (Amendment) Act, 2015.
2.Separate Legal Entity :
A private corporation exists in its own right, independently of its members. According to the law, the business can own assets and liabilities in its name. The company can litigate and be litigated in its name. The management and ownership are separate in private limited companies.
3.Limited Liability :
Suppose the company goes under insolvency or bankruptcy. In that case, the personal assets of the company members will not be utilized for paying off the company's debts as the member's liability is limited to the amount not paid on the shares held by them.
4.Perpetual Succession :
The company has "Perpetual succession," which means it will continue an uninterrupted existence until it is dissolved. The company is a separate legal entity and is not affected by the death or exit of any member. It is hence one of the most important advantages of the Registration of a Private Limited Company.
5.Build credibility :
The company particulars are available on the MCA site, and anyone has access to the company's financial statements, which improves the company's credibility. As any bank or financial institution can check the authenticity of the details being provided by the company.
6.FDI Allowed :
In a Private Limited Company, 100% FDI is allowed. This means that any foreign individual or entity can invest in the company.
7.Fund Raising :
A company enjoys better opportunities when it comes to fundraising. Any financial institution prefers assisting the company compared to sole proprietorships or partnership firms.
1.Private Company Limited by Shares
In such a company, the shareholder's liability is limited to the extent of the member's share in the company. Therefore, a member is not liable to pay more than his amount of share in the company. In other words, the liability of the shareholders in the private limited company is restricted to the paid-up share capital or any unpaid amount.
2.Private Company Limited by Guarantee
The liability of the members is limited to the amount of guarantee given by the such member. The member cannot be held liable for more than his guarantee to the company. The guarantee given by the member can be called upon only at the time of winding up. This type of company is best suited for clubs, trade associations, societies, etc., requiring minimal capital or working capital funds.
3.Unlimited Company
The liability of the members is unlimited in such companies. Their personal property can also be utilized to pay off the company's debt. That does not mean there is no separate legal entity, and the company still has a separate identity from its members.
In India, the Ministry of Corporate Affairs is in charge of the company registration procedure. The Ministry of Corporate Affairs (MCA) has tried to simplify the Private Limited Registration Process in India by bringing many changes. The MCA, vide its notification dated February 18, 2020, has amended the Companies (Incorporation) Rules, 2014, with effect from February 23, 2020, and has introduced a new Form SPICE+ for Incorporation of Companies.
SPICe was an e-form while, while SPICe+ is an integrated Web form offering various other services except for incorporation by 3 Central Govt Ministries & Departments, i.e., Ministry of Corporate Affairs, Ministry of Labour & Department of Revenue in the Ministry of Finance, and One State Government, i.e., Maharashtra, thereby saving time and cost for starting a new business. SPICe+ is part of numerous initiatives and obligations of the Government of India towards Ease of Doing Business (EODB).
SPICe+ is an integrated Web Form. It has been divided into two parts: Part A and Part B. Where Part A is for Name reservations for new companies while Part B offers various other services such as:
The applicant may either submit part A first for reserving the name and once the name is reserved, they can go for Part B or submit both Part A and Part B together.
A. Filing PART A of SPICE+ Form
For first-level automatic scrutiny, we have to click the ''Auto Check'' of the proposed name, following the rules governing the same. We must submit Part A for name reservation or proceed with the incorporation.
After PART A of SPICE+ gets approved, you will receive Name Letter Approval in your mail. This Name Letter will be valid for 20 days; within the next 20 days, you must fill the PART B.
After PART A of SPICE+ gets approved, you will receive Name Letter Approval in your mail. This Name Letter will be valid for 20 days; within the next 20 days, you must fill the PART B.
B. Filing PART B of SPICE+ Form
Firstly, we have to choose whether AOA is entrenched or not. When the applicant is not changing the considerable part of the AOA, then select No or vice versa.
Suppose a company has a share capital; select yes or vice versa. In case the company has a share capital. The applicant needs to provide the complete detail of authorized capital, paid-up capital, and no. of equity shares and preference shares with their respective face values. This is need to be dignifies with the registration of one person company.
After that, the applicant has to provide the proposed company's communication address, phone number, and email address.
If the communication address is the same as the company's registered address, then select yes from the option, and the details will be filed automatically.
Lastly, select the name of the ROC office. After that, save and continue and go on to the next page.
And now, the applicant has to fill in other details like the number of directors and directors having valid DIN/not having DIN. If directors do not have valid DIN, it can be applied only through this form. Save and continue and go on to the next page.
Fill in the subscriber and director details.
Fill in the details of the stamp duty to be paid. The applicant does not have to calculate the stamp duty to be paid manually as it gets pre-filled by clicking on the button.
The applicant must also provide the area code, range code, AO type, and AO number for PAN/TAN application. The applicant must also provide details for the business/profession code based on the company's business.
After filling in all the details applicant needs to attach the required documents and verify that all the documents or details provided are true and correct.
Once all the documents are attached, save them and continue to the next page. On the new page, Declaration and Verification box will appear. Read all the details thoroughly and select the options accordingly before verifying.
Afterward, provide the professional details of the Chartered Accountant or Cost Accountant, or Company Secretary in practice in the declaration.
Then, click on the pre-scrutiny button to conduct preliminary research and to check if there is any error in the form details or not. If not, then click on save and submit the form.
C. Fill SPICe+ PART B linked forms –
Once the applicant has submitted Part B, then four linked forms will be enabled to download. These forms are:
SPICe AOA and SPICs MOA are the pre-filled forms, and the applicant is required to select the relevant clause that applies to his business, and he can also amend the clause based on his business requirement.
AGILE PRO Form provides six services apart from the Private Limited Registration Process. These services are:
The applicant must choose all or any of these services and fill out the form accordingly.
Attachments required for the AGILE PRO Form are :
The applicant needs to ensure that these attachments are the same as being attached in PART B of the SPICe form.
INC-9 is a consent form in which directors undertake that they are not barred or disqualified from acting as a company's director as per the Companies Act, 2013. This form is auto-filled and must be digitally signed by the concerned person for the Private Limited Company Registration in India.
D. Download and upload all forms on the portal
The download option will be enabled when all the forms are filed and submitted. Download all the forms and attach the Digital Signature Certificate (DSC) of the authorized director/subscriber and the professional on the forms. Afterward, submit all the forms as linked on the MCA portal. Make the payment, and your filing is done.
| Digital Signature Certificate (DSC) | Photo PAN – Self attested Address Proof – Aadhar/Bank Statement/ Passport – Self Attested Mobile Number Email-ID |
| Name Application | Two Proposed Name Main Object Clause If Proposed Name is similar to existing company than NOC in form of Board Resolution along with ID of person signing BR. |
| Registered Office Proof | If owned - Utility Bill (Electricity Bill/ Telephone Bill) – not older than two months If on rented – rent agreement along with rent receipt + utility bill If given on free consent then NOC from the owner of the property + utility bill |
| First Subscriber/Director KYC | If Indian Citizen:
Identity Proof – PAN Card or Driving License or Voter ID Card
Address Proof – Aadhar Card/ Bank Statement or Bank Passbook/ Electricity Bill/ Telephone Bill
Email-id and Mobile Number If NRI: Identity Proof: Copy of PAN/Driving License Address Proof: Bank Statement/ Telephone Bill1. If Foreign National: Identity Proof: Copy of Passport Address Proof: Bank Statement/ Telephone Bill1 Note: 1. In case of subscription of MOA by a foreign national, his identity proof and address proof is need to be verified in the manner as laid down in Rule 13 of Companies (Incorporation) Rules, 2014: If the foreign national is residing: -a country who is part of the Commonwealth countries, then to be notarized by a Notary (Public) in that part of the Commonwealth. -A country which is a party to the Hague Apostille Convention, 1961, to be notarized before the Notary of the country of his origin and be duly apostilled in accordance with the said Hague Convention. -a country who is not the part of Commonwealth and which is not a part of Hague Apostille Convention, 1961 as well, to be notarized before the Notary of such country. The certificate of the Notary shall be authenticated by a Diplomatic or Consular Officer authorized in this behalf. If the foreign national visits India to incorporate the company, in such case a valid business visa (except in case of Person of Indian Origin or Overseas Citizen of India) * is required. *Person of Indian Origin (PIO) and Overseas Citizen of India (OCI) card is valid for lifetime of the holder + they should also have the passport. |
| Subscription to MOA by a Body Corporate | If foreign company is a subscriber to MOA (like in the case of wholly owned subsidiary) they can do so by authorising any director or employee by way of board resolution and also specifying the no. of shares being subscribed.
The authorised person will the sign the MOA on behalf of the company. Such board resolution shall also be notarized or apostilled in the country of origin. |
| DIN related information required | Whether Citizen of India Whether residence of India Education Qualification Place of Birth Date of Birth |
Only two resubmissions are allowed; after that, the form gets rejected, and the applicant has to again go through the process of filing the form for name reservation till the payment of fees. As the fees paid earlier will get lapsed.
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No, AOA is pre-filled as per Table F Schedule I
Yes, DSC is required before applying for Incorporation of private limited companies
Yes, Opening of Bank Account is done mandatory and it is filed in AGILE PRO form only.
Minimum Two members are allowed to form a private limited company
You can go to MCA > MCA Services > Company Services > Check Company Name. You can write the name of your proposed company and check.
After receiving Certificate of Incorporation, every company needs to file e-from 20A Commencement of Business with ROC within 30 days of Incorporation.