Private Limited Company

Private Limited Company

By - Jagdish Lade

Private Limited Company Registration

Private Limited Company, is the most popular and prevalent legal structure for registering a company in India. Private Limited Company is a type of corporate legal entity. If you are looking forward to open a business and wish to expand it in future, then this is the best option.
In this type entity a company can appoint minimum two members and the maximum limit is 200.

Why choose a private limited company?

  1. Separate Legal Entity

In the eyes of the law, a company and its owner as two separate entities. A company is separate at law from shareholders, directors, promoters. All the processes such as opening of bank accounts, hiring employees, obtaining licenses etc will all be done under the company name and not under the name of its member’s.

  1. Limited Liability

A member (Shareholders/Directors) of a company has no personal liability to the creditors of a company for company's debts. In case the company incurs huge loss, the bank and the creditors can sell the company's assets but not the personal property of the director as a director has limited liability to its creditors. The owners/ shareholders are liable only for the amount they have invested in.

3. Investment-ready

In a Private limited company, a fund can be raised easily as there is a clear distinction between shareholders and directors. The company can also raise investment from incubators, government, venture capitalist etc.

4. Easy Debt Access
A private limited company can issue debentures, and can also accept deposits from the public, etc.  

5. Borrowing Capacity
A Private Limited Company can raise the equity funds in India. Pvt Ltd Companies are preferred by banks, VCs & investors to provide funds as compared to partnership firms or proprietary concerns.

6. Perpetual Succession
A company acts as a separate legal entity and is not affected by death or other departure of any member. It continues to remain in existence irrespective of the changes in ownership.

7. Easy Transferability

The ownership of a business can be transferred very easily by simply transferring the shares of the company.

8. Owning Property

A Private Limited Company is a separate, legal person can obtain, enjoy, own and alienate, property in its name. Property owned by a company may be building, machinery, intangible assets, land, residential property, factory, etc., No shareholder can stake a claim upon the property of the company - as long as the company is the going concern.

Company Registration is governed by the Ministry of Corporate Affairs, Companies Act, 2013 and the Companies Incorporation Rules, 2014. To register any type of private limited company, only two shareholders and two directors are required. A natural or single person can be both as a director and shareholder, while a corporate legal entity can only be a shareholder.

At ISPEEDBIZ, we provide great support for online company registration across all parts of India. It generally takes 10-15 working days to complete online company registration, subjected to the government processing time and the client document submission.

Documents required for incorporation:

  1. PAN Card of directors
  2. Passport size photograph of directors
  3. Aadhaar Card/ Voter identity card of directors
  4. Rent agreement (If rented property)
  5. Electricity/ Water bill (Business Place)
  6. Property papers (If owned property)
  7. Landlord NOC (Format will be provided)

*Note: Identity and address proof will be required for all directors and shareholders of the company and for Indian nationals, PAN is mandatory.

Registration Process Explained:

  1. Application of DSC & DIN

First, the partners will have to apply for Digital Signature Certificate (DSC) and Director Identification Number (DIN). The Digital signature is an online signature which is used to fill the online form. Whereas DIN refers to Directors PIN number issued by MCA. 

  1. Name approval

First check for the company name availability. Then you need to provide 3 different options for your company name to MCA of which one will be selected. Names provided should ideally be unique and suggestive of company business.

  1. MOA & AOA submission

Once a name is approved, one needs to draft Memorandum of association and Articles of Associate. Both MOA and AOA are filed with the MCA with the subscription statement.

Get incorporation certificate

Usually, it takes 15- 25 days to form a Private limited company and get the incorporation certificate. Incorporation certification is a proof that company has been created. It also includes your CIN number.

  1. Apply for PAN, TAN and Bank account

Once your Private Limited Company is created then you need to apply for PAN and TAN. PAN and TAN are received in 7 working days. Post this, you can submit the Incorporation certificate, MOA, AOA and PAN with a bank to open your bank account.

Additional benefits received:-

iSpeedBiz provides complimentary kit worth of Rs.5000 FREE of cost with its Company Registration package.

Complimentary service includes,

  1. Incorporation Kit – Payment of Challan Copies, Invoice of Company Incorporation, Post Incorporation Compliances, INC 32 SPICE e copy etc.
  2. MSME Udyog Aadhar
  3. Payment Books and Receipt Book.
  4. Bank Accounts opening support.
  5. Share certificate Design
  6. Consultancy for 2 months.

Get your company registered with India’s leading expert - Click Here to get registered today.