PRIVATE LIMITED COMPANY
Private limited company is the most prevalent and popular type of corporate legal entity in India. Private limited company registration is governed by the Companies Act 2013 and the Companies Incorporation Rules, 2014. In this article, we look at the private limited company registration process and documents required in detail.
The incorporation of a Private limited company is one of the highly recommended ways to start a business in India. Such a company provides limited liability for its shareholders with certain restrictions placed on the ownership. In a private limited company, partners are the manager of the company.
What is private limited company?
A private limited company is a privately held business entity. It is privately held by the shareholders and maximum number of shareholders should not be more than 200. Similarly, the liability arrangement in a private limited company is that of a limited partnership , where in the liability of a shareholder extends only up to the number of shares held by them.
Beyond the value of the shareholders can not be held liable before the registration of a private limited company, its objectives are determined likewise, the governing body for such a company is the ministry of corporate Affairs (MCA).
There is a limited ,which means the members of the company are not at the risk of losing private assets. If a company fails, the shareholders aren’t liable to set their assets for payment Fewer shareholders.
Placing a private limited company is one of the highly recommended ways to start a busuness in india
Types of Private Limited Company
1. Company Limited by Shares:
In companies limited by shares, the liabilities of members are limited to a nominal share amount mentioned in the Memorandum of Association. There is no liability of shareholders as the shareholder cannot be asked to pay more than the amount of his/her share capital that is invested in the company.
2. Company Limited by Guarantee
Here the member’s liability is limited to the amount undertaken in the Memorandum of Association. Basically, Company Limited by Guarantee cannot be held liable for the amount greater than the guarantee performed by the member in Memorandum. Shareholder's guarantee, in a company Limited by Guarantee, can be sought only when the company is winding up.
3. Unlimited Companies
These are those types of businesses where there are no restrictions on their member’s liability. The liability of members goes over the entire amount of the company's debts and liabilities. So, an unlimited company's creditors get the right in the case of winding up.
Benefits of company registration
Registering a company offers many benefits. A registered company increases the authority of you business. It help your business:-
1. protects from personal liability and protects from other risk and losses.
2. Acquire good investment from reliable investors with ease,get up of bank credits.
3. Provides liability protection to protect the company’s assets.
4. Attract more customers.
5. substantial capital contribution and greater stability.
6. Rise the potential to grow and expand.
The Requirements are:
Members- Before the registration, there is a minimum requirement of two members and a maximum of 200 members or shareholders can be there according to the companies Act 2013.
Directors- There is a minimum requirement of two directors for the process of registering in the private limited company. Both the directors should have director identification numbers. From two of them, one of the directors must be a resident of India or he/she should have stayed in India for not less than 182 days in a previous calendar year.
Name- Most important thing is the name of a private limited company. It is divided into three parts as first the name, second the activity, and third the private limited company. For all private companies, it's necessary to use the word private limited company at the end of its companies name so that anyone can know the type. One needs to send 5-6 unique names for approval to the ROC and should not resemble any other companies name.
Registered office address- It is essential for going with the registration of the company. The company’s owner should provide the temporary address of the company, for the time being, does not get registered by ROC. As registered then the permanent address of its registered office must be notified to the registrar of the company.
To get a digital signature certificate-In the era of globalization, everything is done online, so the documents are submitted electronically. For this, every company must obtain a digital signature certificate for verifying the authenticity of the documents.
Need of professional certification- In every company there are many professionals with specialization of work. So in the case of incorporating a private limited company certification by these professionals are must be attached. Professionals like company secretaries, chartered accountants, cost accountants, etc.
Company registration process:-
Step 1:- Obtain DSC
Step 2:- Apply for the DIN
Step 3:- Application for the name availability
Step 4:- Submission of MoA and AOA to register a Private Limited Company.
Step 5:- Apply for the PAN and TAN of the company.
Step 6:- RoC issues a certificate of Incorporation with a PAN and TAN.
Document Required for Online Company Registration:-
without having a proper identity and address proof , a Private Limited Company registration cannot be done in India.
Documents required are:-
- Govt. ID proof - voter’s ID or Passport or driver’s license.
- Bank Statement
- Utility bill either mobile or gas or electricity.
- Passport size Photograph.
- specimen signature-Director signature on blank paper.
Not just the only private limited company is a common form of business. This has many advantages including more scope of profit and much stability. Advantages come with disadvantages so this does not mean that it is an ideal form of business since it has its own disadvantages also. But the advantages of a private limited company overrule the disadvantages of this kind of company.