Introduction

In this aeon of the competitive business world, starting and registering a new business is the toughest decision one has to make. The main question comes what to choose among a number of business entities to register your business. Nowadays, maximum business operators want to register as Private Limited Company because in because of their numerous benefits such as, limited liability; separate legal entity etc.

These can be registered as small entities even with less capital. This type of business entity is a bridge between Partnership and Public Limited companies in India.

It is regulated by the Companies Act, 2013 and the Companies Incorporation Rules, 2014 under the Ministry of Corporate Affairs (MCA).

It can be incorporated with a minimum of two directors and two shareholders. The members/ directors and shareholders of the company can run operations according to their own rules and regulations without any other person’s interference.

Private Limited Company -

A private limited company is a business entity that is privately held, and in which the liability of the directors/members is limited to their shares. This type of entity’s share are prohibited from being publicly traded.

A private limited company is an independent legal structure.

A private limited company is the most preferred business structure as it has a bundle of benefits for the members of the company.

Benefits of Private Limited Company -

• Separate Legal Entity - This provides a benefit to the organization to acquire assets on its own name.
• Limited Liability - liability of the company’s shareholders is limited to the amount of unpaid value of the shares owned by them.
• Ease in share transfer

Features of a Private Limited Company-

• Limited liability–the liability of each shareholder or member is limited, in case if the company faces any loss, then the personal assets of the shareholders are not at stake.
• Number of Directors- minimum two directors are needed to commence the operations
• Index of members–it doesn’t need to maintain an index of its members, unlike the public company.
• Number of members– requires a minimum of 2 members and a maximum number of 200 members.
• Perpetual succession– there will be no impact on the company if any member dies.
• No minimum capital requirement
• All Private Limited Companies are required to use the word Private Limited in the suffix of its name.
• The Private Companies cannot borrow any funds from the public.
• Ease of funding – Capitalist and angel investors are mostly interested to invest in private limited companies.

Eligibility of Private Limited Company -

• Minimum of 2 directors
• At least one director should be a citizen of India.
• Minimum authorised share capital - Rs1 lakh.
• No minimum paid-up capital is required

Documents required to Register Private Limited Company -

• PAN Card from all Directors
• ID proof from the directors(Driving License/ voter ID/Passport)
• Bank statement/ mobile bill of all directors
• Address proof for the company registered office (Rent agreement, Possession letter etc.)
• Electricity Bill of the office building
• Trademark registration Certificate (if any)

Procedure for Registration of Private Limited Company

Obtain DSC

• It’s necessary to apply for a Digital signature of the designated partners before starting the private limited company registration.
• The DSC is important as all the documents before submission are required to be digitally signed.

Name Filing

• Form Spice-Part A is the new form that is to be filled against earlier Form RUN. It is followed only when the name is finalized. Spice-Part A is a form that gives the option to fill in one name only.

Drafting of Memorandum of Association

• The Constitution of the Company is defined by MOA.
• It includes mandatory clauses (Name clause, Object clause, Registered Office clause, Liability clause, Capital clause ) which are required for operating the company

Drafting of Articles of Association  

• AOA defines the rules and regulations for the operations of the company

Filing SPICE-Part B

• Spice-Part B is about disclosing the details of the Directors and the Shareholders. with details like Registered Office, objects of the Company
• This i-form is filled with other documents and must be accompanied by SPICE- Part B required for Registration

AGILE-Pro Filing

• One can file for to GST, ESIC as well as EPF along with company registration. Declaration in SPICE-9

Filing SPICE-Part B

• In this forms the directors and shareholders provide a declaration of record of conviction.

Issuance of Incorporation Certificate

• Incorporation Certificate is issued by the authorities, after documents scrutiny.
• PAN and TAN are also issued

Expert’s Advice

Companies registered which are registered as Private limited are ideal for start-ups and for the growth of the business. One can register as private limited and can enjoy the benefits of raising funds and limited liability. It is governed by MCA under Company Act, 2013. The procedure of registration is really easy and the registration can be done within 6-7 days. As the filing requires expertise to draft the documents, you can contact Corpseed for the same.