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Private Limited Company in India

India is one of the biggest markets for establishing a business and making it flourish through strategizing and gaining control of its operations. There are many types of companies that you can register with,either online or offline, based on your business needs and controlling authority. People generally go for company registrations like Limited Liability Partnerships, Private Limited Companies, One-person Companies, etc.

One of the most used company registration forms in India is Private Limited Company. In this type of company registration, the shareholders have limited liability over the company. Private Limited Company Registration in India makes sure that shareholders and directors are separate entities in a business.

Corpbiz can help you get the Business Registration Number (BRN number) and register your private limited company. Our experienced executives ensure that the company registration process is smooth, fast, and cost-effective for the applicant. We also ensure that the established company follows the regulations formulated by the Ministry of Corporate Affairs. We will help you get the PAN and TAN along with the incorporation certificate.

What is a Private Limited Company?

A Private Limited Company is represented by the symbol "Pvt. Ltd". It is typically owned by 2 - 50 individuals and has a limited liability. The shareholders of the company are not personally liable for the losses of the company. A director is someone who is chosen by shareholders to oversee management.

Shares of the private company cannot be sold publicly, although they can be issued to raise funds. This ensures that the shareholders don’t lose control over the company and that the company can get funds to perform its operations.

What are the Characteristics of a Private Limited Company?

The characteristics of a Private Limited Company are as follows

1. Separate Legal Entity

A Private Limited Company registration ensures that the company has its own identity, even in the eyes of the law. It is eligible to own property, enter into contracts and agreements with individuals and other entities, and file and defend a legal case.

2. Limited Liability Protection

The shareholders of a Private Limited Company are limited in their liability. They are only liable up to the extent of their shareholding in the company, and after that, the liabilities have to be managed by the company as a legal entity.

3. Number of shareholders

The number of shareholders in a private limited company ranges between 2 to 200. At no point in time, they can be below or above that.

4. Number of Directors

A Private Limited Company should have at least two directors at every point. One of these directors should mandatorily be Indian.

5. Company Name

The name of the Private Limited Company should mandatorily include the term ‘Private Limited’ at the end of its name.

6. Share Capital Requirements

The share capital of the Private Limited Company should always be above the limit of Rs 1 Lakhs.

7. Transfer of Shares Restrictions

Transferring of shares is restricted within the Private Limited Company. These shares can only be transferred by complying with the company’s Articles of Association or by getting the approval of the board of directors.

8. Compliance

Private Limited Company registration comes with various mandatory regulatory and legal compliances. Adherence to these compliances includes maintaining correct financial records, filing annual returns to the registrar of companies, and conducting annual general meetings.

9. Public Share Listing

It is prohibited for the Private Limited Companies to list their shares, securities, or debentures for public issuance. Only a Public Limited Company can do so.

10. Perpetual Succession

A private limited company is said to have perpetual succession if no one dies or the business has financial difficulties such as bankruptcy. It does not cease to exist and remains lawful.

Types of Private Limited Companies in India

There are three types of Private Limited Companies in India, which are as follows

1. Company Limited by Shares

A Memorandum of Association is made and the shareholder's liability is made limited to the company. Be it losses or gains, they will be liable up to their shareholding in the company.

2. Company Limited by Guarantee

The guarantee is limited to the liabilities of the members, as mentioned in the company’s Memorandum of Association. However, the guarantee gets invoked only when the company is winding up.

3. Unlimited Liability Companies

In the case of Unlimited Liability Companies, there is an unlimited liability of the shareholders be it for debts or liabilities. Still, these shareholders cannot be sued based on their liabilities since the private limited company has its legal entity where it has to be sued in case of default.

Benefits of Private Limited Company Registration

There are a lot of benefits of a Private Limited Company registration in India since it helps form a good image of the business and builds customers' trust in the functioning and operations of the business. The benefits of a Private Limited Company Registration are as follows

  • It makes sure that the shareholders and key members of the company are not individually liable for any losses or liabilities of the company.
  • It is eligible to own property, come in contracts and agreements with individuals and other entities, and also to file and defend a legal case. It makes the company a separate legal entity in the eyes of the law.
  • It helps maintain the trust of the customers in the business and its operations.
  • It makes sure that more and more customers are attracted to the products or services of the company.
  • Private Limited Company registration helps the company follow all the legal or regulatory compliances to avoid fines and penalties.
  • It also benefits the company in attracting investors, angel investors, or venture capitalists to invest in the company to make it grow further.
  • The other benefit of Private Limited Company registration is that it entitles the companies to claim certain tax exemptions and other benefits.
  • The company can also sue any individual or an entity in a court of law for a wrongful act.

Requirements for Registering a Company in India

The basic requirements for registering a Private Limited Company are as follows

1. Members and Directors Requirement

According to the Companies Act of 2013, a Private Limited Company requires 200 members and 2 directors to be registered in the country and perform its operations. A Director Identification Number should be issued by the Ministry of Corporate Affairs in favour of the directors of the company. Apart from this, a minimum of 1 director being an Indian should have spent at least 182 days in the country.

2. Name of Company

The name of the Private Limited Company should mandatorily include the term ‘Private Limited’ at the end of its name.

3. Registered Office Address

To complete the Private Limited Company registration in India, the applicant has to provide the official registered address of the company. It is the place where all the business operations take place.

Stepwise Company Registration Process in India

The stepwise process for company registration in India is as follows

Step 1- Obtaining a Digital Signature Certificate

The Controller of Certification Agencies (CCA) must provide a Digital Signature Certificate (DSC) to each director and shareholder. The Directors of the Private Limited Company must provide crucial details like their phone number, email address, PAN card, Aadhaar card, and passport pictures to accomplish this. Those who are foreign nationals must further present official documentation.

Step 2- Acquire a Director Identification Number (DIN)

One of the main things a director must do when registering a Private Limited Company is obtain a Director Identification Number. This number must be provided while filling out the registration form.

Step 3- Company Name Reservation (SPICe+ Form Part A)

To obtain a unique company name the applicant has to fill SPICe+ Form. For this, the applicant has to select the type of company for registration, category along with sub-category, class, specify industrial activities primary division, and a business description. Two names are to be mentioned for the approval of the business name.

Step 4- Company Details Submission (SPICe+ Form Part B)

For this, the applicant has to provide details like the address of the registered office, capital requirements, details of directors, PAN, TAN, stamp duty, and other important documents as required. It has to be provided as mentioned in the Companies Act of 2013.

Step 5- Submission of AOA and MOA

The Memorandum of Association and Articles of Association need to be drafted with the subscribers' and professionals' digital signatures before they are submitted for approval to the Ministry of Corporate Affairs.

Additionally, the applicant has to fill out the AGILE-PRO-S form to register for EPFO, ESIC, GST registration, bank account, and a shop and establishment license depending on different states.

(After going through this process in the right manner, the Ministry of Corporate Affairs issues the Incorporation Certificate along with the TAN, PAN, and CIN)

Private Limited Company Registration Checklist

The Private Limited Company Registration Checklist involves compliance with the Companies Act, 2013. These requirements are as follows -

1. Number of Directors

The Private Limited Company must have two directors at all times without fail, with a maximum of up to 15. Out of a minimum of two directors, one must be an Indian resident (residing at least 182 days in India in the previous financial year).

2. Company Name

The company name should be unique and should not be in the name of another country or trademark registered in India. The name of the Private Limited Company should mandatorily include the term ‘Private Limited’ at the end of its name.

3. Capital Requirement

As such, there is no minimum requirement for capital; however, the company should have a minimum of Rs 1 Lakh of authorized capital.

4. Registered Office

The company should have a registered office which can even be a rented place having NOC from the owner.

Why is it Important to Select the Right Business Structure?

It is important to select the right business structure because

  • Following the right business structure makes sure that the company is complying with the rules, regulations, and laws. It protects the company from legal issues like fines, penalties, and even closure of the company.
  • Choosing either a Limited Liability Partnership or a Private Limited Company makes sure that the personal assets are not involved in the company and they are free from any personal liability in the form of debts.
  • To reduce the tax liabilities of the company, it is essential to pick the right business structure depending on the nature of the business.
  • The right company structure is important to choose for attracting potential investors from the market.
  • The right business structure is mandatory for managing the operations of the company depending on the nature of the business and other factors.
  • The business structure chosen by the applicant should be in line with both the short-term goals as well as the long-term goals of the company.

Compliances for Private Limited Company Registration

Adherence to the compliance set is very important for the Private Limited Company registration to avoid legal issues, fines, and penalties. These compliances are as follows

1. Appointment of Auditor

The Private Limited Company, upon its registration, should hire a practising and certified Chartered Accountant within 30 days without fail.

2. Director DIN

Directors with DINs should complete the DIN KYC process. The Ministry of Corporate Affairs verifies this using the information provided while getting the DIN.

3. Business Commencement

Within 180 days of the company's incorporation, shareholders must deposit the subscription sum specified in the Memorandum of Association (MOA). The business also has to open a current bank account. Therefore, shareholders of a company with a paid-up capital of ₹1 lakh must deposit ₹1 lakh into the firm's bank account and provide a copy of the bank statement to the Ministry of Corporate Affairs (MCA) to acquire a business incorporation certificate.

4. Annual Filings

The Private Limited Company must provide MCA with a copy of their financial statements for the previous year. Form MGT-7 and Form AOC-4 are to be provided to the MCA annually with the signs from the directors and other professionals. The company incorporated between the period of January and March should provide the annual returns in the following financial year.

5. Income Tax Compliance

Upon the Director’s sign, the company must file the annual Income Tax returns using Form ITR – 6 within the due date to avoid fines.

Types of Company Structures in India

The types of business structures are as follows –

Company Type

Tax Benefits

Legal Compliance

Ideal For

The Private Limited Company

No Tax for the first 3 years as per Startup India

Depreciation Advantages as well

Filling of Company tax returns and ROC returns

Annual audit report

High Turnover companies

The Public Limited Company

Tax exemptions as per Startup India

 

Filling of Company tax returns

Annual audit report

Increased turnover companies

Limited Liability Partnership

Depreciation Advantages

Filling of Company tax returns and ROC returns

 

Service based business

Less capital business

One-Person Company

No Tax for the first 3 years as per Startup India

Depreciation Advantages as well

No Tax while distributing Compensation

ROC Compliance

Business Recoveries

Single person limiting their liability

Documents Required for Company Registration Online in India

Corpbiz can help individuals get their company registered through an online mode with less hassle. The Documents that are required for an online company registration are as follows

1. Documents required for Shareholders and Directors

  • PAN Card
  • Identity Proof (either passport, Aadhar card, Driving License, or Voter ID)
  • Passport-sized photo (coloured)
  • Residential Proof (either electricity bill, telephone/mobile bill, gas bill, or bank statements)

2. Documents required for proof of Registered Office Address

  • Property Ownership Proof (either electricity bill, telephone/mobile bill, or gas bill)
  • Rent/ Mortgage/ Lease Agreement
  • NOC from the owner (in case the registered office is rented)

Private Limited Company Registration Fees

The fee for Pvt Ltd Company Registration in India depends on various factors like the authorized capital of the company, certain state requirements, and other expenses.

To get an accurate amount of fee for registration, we recommend you to talk to our executives; they will analyze your requirements and, based on that, tell you the fee amount to get your Private Limited Company registered in India.

Private Limited Company Registration Timeline

With growing technology, the registration time for a Private Limited Company has considerably been reduced. The applicant needs to visit‘mca.gov.in’and fill out the SPICe+ Form. A digital signature of the promoters and directors is needed with the authentication from a registered CA, CA, or CMA to start the registration process, which usually takes time up to 10-14 days. Here is the timeline for registration

Day 1- Documentation and Digital Signature

All the documents should be assembled for the registration process, along with the NOC from the owner of the premises to be used as registered places of business. Then, a Digital Signature Certificate of the directors and promoters is required.

Day 4- Name Reservation

A unique name has to be taken and authorized by the registrar of companies which takes around 2-3 days.

Day 7- Filling of Forms

The Spice Plus form, which incorporates several forms like Agile Pro, e-MOA, e-AOA, and INC-9, is used to send the application for the certificate of incorporation to the Registrar of Companies (ROC) once all necessary paperwork has been completed. The ROC normally needs two to three days to review and process an application, making it possible to complete the incorporation procedure in less than a week.

ROC generally takes 2-3 days to grant the certificate of Incorporation.

Check Business Name Availability

Before the incorporation of any Private Limited Company, the applicant has to get the company name approved by the registrar of companies. The approval for a name usually takes around 2-3 days after the request is made, and there are no non-compliance or trademark infringements. The Private Limited Company must use "Pvt. Ltd" at the end of its name, and the name should be such that it denotes the working area of the company.

Certificate of Incorporation of a Private Limited Company

To state the legal existence of the company in the market, a Certificate of Incorporation is granted to the company by the registrar of companies. It is an official document that ensures that the company meets regulatory compliance requirements for its registration. The Certificate of Incorporation contains details like

  • The registered name of a Private Limited Company
  • The ROC assigned company CIN
  • Incorporation date
  • The official registered address of the company
  • The authorized capital that the company is allowed to issue
  • Basic details of the directors of the company

The Certificate of Incorporation is a legal document that can be required for many important activities, such as opening a company’s bank account, applying for permits and licenses, entering into contracts, etc.

Why Is Obtaining a Company Registration Certificate Important?

The importance of obtaining a company registration certificate is as follows

  • The certificate is granted by the Ministry of Corporate Affairs, thereby acknowledging its legal existence in the market. It gives the company a unique CIN, making it function in the country through its business activities.
  • It serves as an authorization for the company that it can commence its business activities in the country as per the MOA and can enter into contracts and business with other companies as well.

What are the Consequences of Misleading Information?

Section 7 (7) of the Companies Act of 2013 makes sure that the companies are not providing misleading information. In case of any reported misleading information, the tribunal can take the following actions

  • It can order for regulating companies' management and modifications in its MOA.
  • It can order the company to the members from their responsibilities.
  • It can order the ROC to cancel the registration of such a company.
  • It can even order the dissolution of such companies under grave circumstances.

What are the Rights and Benefits Granted by a Company Registration Certificate?

Obtaining a Company Registration Certificate bestows several rights and benefits that correspond with the legal framework of your business. These include tax exemptions, lifelong status, and various advantages that boost operational adaptability and legitimacy. Tax incentives reduce costs, while lifelong existence guarantees longevity, promoting stability and continuity. In addition, several benefits reinforce the company's position, promoting expansion and competition within the industry.

A Glimpse of the Glossary

1. Certificate of Incorporation

It is a legal document claiming the legal status of the entity and its course of business in the Indian market.

2. Digital Signature Certificate

It is granted to sign the documents electronically and complete the registration process or any other things in the future.

3. Dissolution

It is the process through which the existence of such a company is terminated from the market.

4. Board of Directors

It is the controlling body of an organization that makes sure that the entity is run as per the legal and regulatory requirements in the country. These are responsible for making important decisions in the organization.

5. DIN

It is the Director Identification Number that is issued to the Directors of the companies before granting the certificate of incorporation.

Data-backed Report on Company Registrations in India

State

September 2023

October 2023

November 2023

December 2023

January 2024

February 2024

Karnataka

14,000

16,000

18,000

20,000

22,000

24,000

Tamil Nadu

13,000

15,000

17,000

19,000

21,000

23,000

Andhra Pradesh

11,000

13,000

15,000

17,000

19,000

21,000

Delhi

16,000

18,000

20,000

22,000

24,000

26,000

Gujarat

 

12,000

14,000

16,000

18,000

20,000

22,000

Maharashtra

20,000

25,000

25,000

28,000

30,000

32,000

Kerala

10,000

12,000

14,000

16,000

18,000

20,000

Our Private Limited Company Registration Package

Our Company Registration Package includes

Reasons to Join Hands with Corpbiz for Private Limited Company Registration

Corpbiz provides expert consultancy and support to clients to get their jobs done in the required timeframe. You can complete the company registration process without having much trouble or visiting offices day after day. We can complete your company registration process in about 10 – 14 days. To register your company in 100+ vibrant cities of India without any hassle, reach out to our experts.

Frequently Asked Questions

The post-registration compliances for a company are that it has to regularly file income tax returns, submit annual returns file, submit annual financial statements, comply with safety and environment standards, and legal and regulatory compliance.

Any individual, including a foreign national, is eligible for private limited company registration in India. They just have to follow the necessary procedures to get the registration.

To check the status of your company registration, you can visit the Ministry of Corporate Affairs' official website or use the MCA21 portal.

The fee for Pvt Ltd Company Registration in India depends on various factors like the authorized capital of the company, certain state requirements, and other expenses. A certain amount is also charged by professionals like CA, CS, and CMA.

The types of company incorporation in India are Private Limited Company, Public Limited Company, Limited Liability Partnership, One-person Company, and others.

Yes, you can register a company on your own by visiting the Ministry of Corporate Affairs website; however, it is advised to seek professional help to get the registration fast and without any problems.

Yes, any individual above 18 years of age can be a director of a Private Limited Company. But there must be one director in the company of Indian origin.

No, there is no minimum capital requirement for a Private Limited Company.

No, a Private Limited Company cannot issue shares to the general public.

No, it is not possible to register a Private Limited Company without a registered address.

A CIN (Corporate Identification Number) is allotted to the companies when they are registered with the MCA. It is a unique alphanumeric number granted to every registered company.

You can download the certificate of incorporation through the website of the Ministry of Corporate Affairs.

The full form of BRN is the Business Registration Number.

BRN Certificate is the official document that establishes that a company is formed and registered under the Companies Act of 2013.

The general AOC 4 filing due date is within 30 days of the conclusion of the annual general meeting.

The general MGT 7 filing due date is within 60 days of the conclusion of the annual general meeting.

The full form of the AOC 4 form is Attestation of Compliance.

The ROC filing due date is within 30 days of the conclusion of the annual general meeting.

The purpose of the AOC 4 Form is to file the financial statements for the year of the company with the company's registrar.

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