Registering a private limited company
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Registering a private limited company
What will you receive?
- Digital Signature for 2 Director
- DIN numbers for 2 Directors
- Hard copies of MOA and AOA
- All Company Registration Process (Incorporation Certificate).
- Includes All Government Fees
- PAN Card
- TDS Number
- Opening a Bank Account (Documentation support)
Private Limited Company (PLC) is the best and most popular option for those who are looking to grow their business. This entity is registered under the Companies Act of 2013 and offers many benefits, including limited liability. It also ensures that personal property will be protected by a separate legal entity. It is preferred by start-ups and growing companies.In India, it is common to choose a private limited business as the preferred option when setting up a new business.
What is a limited liability company?
Private limited companies are a form of business entity that is privately owned and has limited liability. They are popular in India. Its popularity can be attributed primarily to its many advantages, such as limited liability protection, its ease of formation and upkeep, and the fact that it is a separate legal entity.
Private limited companies are legally separate from their owners, and require a minimum of 2 members and 2 directors to operate. These are the main characteristics of a limited company in India.
- Limited liability protection:
Shareholders in a private limited corporation are only liable to the extent that their shares. Even if the company suffers financial losses, their assets are protected. - Separate legal entity:
Private companies have their own distinct identity. Under its unique name, it can be a property owner, enter into contracts, or initiate or defend legal proceedings. - Minimum Shareholders:
Private companies must have at least two shareholders, and they cannot exceed 200. - Minimum number of directors:
For a private limited company, a minimum two directors are required. One of the directors must be a citizen of India. - Minimum share capital:
A minimum paid up capital of Rs. 100,000 The company must maintain a minimum paid-up capital of Rs. 100,000 - Name the firm:
Private limited companies must end their name with “Private Limited.” - Share Transfer Restrictions:
A private limited company’s right to transfer its shares is restricted. Only the Board of Directors can approve the transfer of shares. - Public invitation prohibited:
It is illegal for private limited companies to invite the public to subscribe their shares or debt securities. - Compliance requirements:
Private Limited companies must adhere to a variety of legal and regulatory obligations. These include maintaining financial records and conducting annual general meetings. They also have to file annual returns to the ROC.
Private limited companies:
- Company Limited By Shares:
The liability of the shareholders is limited to the nominal amount of shares stated in the Memorandum of Association. - Company Limited By Guarantee:
Member Liability is limited to the amount of the guarantee specified in your Memorandum of Association. This guarantee can only be invoked during the winding-up process. - Unlimited companies:
Members who are members of unlimited companies can be held personally liable for all debts and liabilities. They are considered to be a separate legal entity and the members of these companies cannot be sued.
Private Limited Company Compliance
GST Registration
All Private Limited Companies in India are required to register for GST within 30 days after incorporation. When the turnover exceeds 40 lakhs INR or INR 20 lakhs for Special Category States, or if the business provides goods or services intra-state, or if it is online.
GST Refund
As soon as a Private Limited Company is registered under GST it becomes necessary for them to file GST Returns. All registered taxpayers, including companies, are required to file GST returns. GST returns are filed either monthly, quarterly or annually depending on the type of GST return form.
Accounting
Each Pvt Ltd Co. must maintain accurate books of account that reflect the true and fair state of the business. Accounting is required for statutory audits, annual filings and IT returns. The auditor of the company will audit these books.
Statutory audit
Each Private Limited Company registered in accordance with the Companies Act must have their book of accounts audited every financial year, regardless of their sales turnover, nature of business or capital. The Board of Directors of Private Limited Companies are required to appoint a Certified Public Accountant in the first 30 days of incorporation, and then conduct an annual audit of their financial statements.
MAT audit
Pvt Ltd Companies must have their accounts audited in order to be eligible for MAT, i.e. Minimum Alternate Tax. The introduction of MAT aimed to bring “zero tax” companies into the tax net, which despite having made substantial profits and paid out handsome dividends do not pay tax because of various tax incentives and concessions provided by the Income Tax Law.
Income tax audit
Every Private Limited Company must have the tax audits done under section 44AB. Section 44AB is a tax audit that aims to verify the compliance with various provisions of Income-tax Law as well as the fulfillment of all other Income-Tax Law requirements. The limit for tax audits under section 44AB amounts to INR 1 crore. 5 crores if at least 95 per cent of the transactions are digital.
ROC Annual filing
Every year, a Private Limited Company must file three forms. The filing is done in relation to the submission of financial statements, i.e. Balance sheet, P&L Account in Form AOC 4, and Annual Return in Form MGT-7. Form ADT 1 is a report from the company about the appointment of an auditor to ROC. Annual ROC filing
IEC Registration
Import Export Code is required for all Private Limited Companies that are involved in Import or export of goods. IE code is valid for life. This code is required for importers and exporters to benefit from exports.
Registration
The name or brand is not fully protected by registering a Private Limited Company. Trademark Registration is the only way to ensure ultimate protection for your business name. You can register your Pvt. Ltd. Co. or brand name, logo or other trademarks.
Documents Required for Pvt. Ltd. Company Registration
PAN Card :- PAN is mandatory for Indian Directors.
Passport (Foreign Nationals Only) :- Passport is mandatory for Foreign Directors or Shareholders.
Aadhaar Card :- Aadhaar is mandatory for Indian Directors.
Passport Size Photo :- Passport size photo of the Directors and Individual Shareholders.
Recent Utility Bill
Name Significance Letter Specimen
Recent Utility Bill Business Place
Benefits of a private limited company
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Name
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Details
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Limited liability
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The responsibility of shareholders is limited to their capital contributions, protecting personal assets from financial obligations and liabilities.
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Legal Identity Distinct:
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Private Limited Companies have a legal identity that is distinct from their owners. It can own assets, enter into contractual agreements and bring or defend legal proceedings under its name
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Constant Existence
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A company's continued existence is independent of changes in directors or shareholders. Its survival is not dependent on the longevity of its employees.
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Ease in Funding
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It is easier to raise capital by issuing equity to investors, venture-capitalists or angel investors. This structure is attractive to external investors.
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Tax Benefits
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Private Limited Companys may qualify for various tax exemptions and benefits, making them tax efficient entities.
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Credibility
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Having the name "Pvt. Ltd."
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Benefits of a private limited company
No Minimum Capital
A Private Limited Company does not require a minimum capital. The minimum capital to register a Private Limited Company is Rs. The total authorized share capital is 10,000.
Separate Legal Entity
A Pvt Ltd Co. has a distinct legal identity before the courts. This means that the assets and liability of the company are different from the assets and liability of the directors. Both are treated as separate.
Limited Liability
The liability of a person is limited, so if the company experiences financial difficulties for whatever reason, personal assets will not be used by the members to pay off the Company’s debts.
Fund Raising
In India, a Private Limited Company is the only business form that can be funded by Venture Capitalists and Angel Investors.
FDI is allowed
Private Limited Companies allow 100% Foreign Direct Investment. This means that any foreign person or entity can invest directly in a Private Limited Company.
Credibility is important
A public database contains the details of a company. This improves the credibility as the company’s details can be easily verified.
FAQs of Registration of PVT LTD Company
What is a private limited company?
Private Limited Company (PLC) is a business structure in which the shareholders’ liability is limited to their investment. It is a legal entity separate from its owners.
How many members are required to start a private limited company?
The minimum number of members to form a private limited corporation is two, while the maximum can be 200.
What documents are required for the registration of a private limited company?
Documents commonly required include proof of identity and address of directors, Memorandum of Associations (MOA), Articles of Associations (AOA), as well as proof of the registered office address.
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