{"id":16347,"date":"2020-09-15T13:57:21","date_gmt":"2020-09-15T08:27:21","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=16347"},"modified":"2022-11-16T14:00:32","modified_gmt":"2022-11-16T08:30:32","slug":"know-about-private-limited-company-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/know-about-private-limited-company-india\/","title":{"rendered":"All you need to Know about Private Limited Company"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Although a Private Limited company is the antiquated business model, it is still preferred by thousands of entrepreneurs for its countless advantages and popularity. Unlike other business models, a private limited company seeks less compliance and offers better reliability.&nbsp; In this article, you will come to Know about Private limited company. <\/p>\n\n\n\n<p>A Private Limited Company runs as per the provisions mentioned under the Companies Act 2013 and Companies Incorporation Rules, 2014. This article will brief you on everything about the private limited company, its traits, advantages, documentation pre-requisites, and registration process.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"576\" height=\"464\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-58.png\" alt=\"Private Limited Company\" class=\"wp-image-16348\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-58.png 576w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-58-300x242.png 300w\" sizes=\"(max-width: 576px) 100vw, 576px\" \/><\/figure><\/div>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/know-about-private-limited-company-india\/#Things_you_must_Know_about_Private_limited_company\" >Things you must Know about Private limited company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/know-about-private-limited-company-india\/#What_are_the_Traits_of_a_Private_Limited_Company\" >What are the Traits of a Private Limited Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/know-about-private-limited-company-india\/#What_are_the_Registration_Prerequisite_for_a_Private_Limited_Company\" >What are the Registration\nPrerequisite for a Private Limited Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/know-about-private-limited-company-india\/#How_to_register_a_Private_Limited_Company\" >How to register a Private Limited\nCompany?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/know-about-private-limited-company-india\/#New_SPICe_Form_for_Company_Registration\" >New SPICe+ Form for Company Registration&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/know-about-private-limited-company-india\/#Documentation_Prerequisites_for_Online_Company_Registration_for_SPICe_form\" >Documentation Prerequisites for Online Company Registration for SPICe+ form<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/know-about-private-limited-company-india\/#Documentation_prerequisites_for_Online_Company_Registration_regarding_AGILE-PRO\" >Documentation prerequisites for Online Company\nRegistration regarding AGILE-PRO:-<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/know-about-private-limited-company-india\/#Prerequisites_for_Online_Company_Registration_regarding_Declaration_in_form_%E2%80%98INC-9\" >Prerequisites for Online Company Registration regarding\nDeclaration in form &#8216;INC-9&#8217;:-<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/corpbiz.io\/learning\/know-about-private-limited-company-india\/#Documents_that_work_as_address_proof_for_Online_Company_Registration\" >Documents that work as address proof for Online Company\nRegistration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/corpbiz.io\/learning\/know-about-private-limited-company-india\/#Documents_that_work_as_a_residential_proof_for_Online_Company_Registration\" >Documents that work as a residential proof for Online\nCompany Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/corpbiz.io\/learning\/know-about-private-limited-company-india\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Things_you_must_Know_about_Private_limited_company\"><\/span>Things you must Know about Private limited company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following section will let you know about Private limited company. <\/p>\n\n\n\n<p>A private limited company is a type of\nbusiness form that runs by a group of individuals known as shareholders. A\nmaximum of 50 shareholders can run the Private Limited Company. The liability\narrangement in a privately held business entity is similar to a limited\npartnership, wherein the shareholder\u2019s liability is equivalent to the number of\nshares held by them. Identifying the business objective is the first step\ntoward the registration of the private limited company. The Ministry of\nCorporate Affairs (MCA) is a regulatory body that governs the privately held\nentities in India. <\/p>\n\n\n\n<p>Here\u2019s how section 2 (68) of the <strong>Company Act, 2013<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/companies-act\/companies-act-2013.html\"><strong>[1]<\/strong><\/a><\/sup> define the privately held entities in India:-<em>\u201cA Company having a minimum paid-up share capital as may be prescribed, and which by its articles\u201d<\/em><\/p>\n\n\n\n<p><em>(i) restricts\nthe right to transfer its shares<\/em><\/p>\n\n\n\n<p><em>(ii) except in the case of One Person Company, limits the number of its members to two hundred; (iii) prohibits any invitation to the public to subscribe for any securities of the company.\u201d<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Traits_of_a_Private_Limited_Company\"><\/span>What are the Traits of a Private Limited Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following section would explain the traits of the private limited company. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Membership<\/h3>\n\n\n\n<p>A minimum of the two members i.e. shareholders is required to lay a foundation of a Private limited company. Apart from that, a maximum of 200 shareholders can exist in such a business model. Also, a minimum of two directors is required to execute the operation of a private limited company.  <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Separate\nLegal Entity<\/h3>\n\n\n\n<p>A private limited company is an autonomous business entity and follows the notion of perpetual succession, which means that even after the demise of the member, the company will continue to exist. Also, insolvency doesn\u2019t affect the existence of the company. Such companies can only dissolve by the way of a resolution passed in the general meeting under the supervision of the core members. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Minimum\nSubscription<\/h3>\n\n\n\n<p>Subscription is referred to as the amount\navailed by the private limited company via issuance of shares. Every company\nthat seeks private limited company registration is under the regulatory\nobligation to raise such an amount equivalent to the 90% of shares issued\nwithin a certain time limit.&nbsp; <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Minimum\nPaid Up Capital<\/h3>\n\n\n\n<p>Prior to the amendment, the private limited\ncompanies were entitled to maintain a minimum paid-up capital of Rs 1 lakh. In\norder to make this business model more conducive for entrepreneurs, the\ngovernment has waived off this provision. As of now, the entities are not under\na legal obligation to procure such capital to incorporate a company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Limited\nLiability Structure<\/h3>\n\n\n\n<p>In the privately held business entity, the shareholder\u2019s liability is limited. The personal assets of the shareholder are not taken into account when it comes to counteracting the business loss and compensating the same. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Registration_Prerequisite_for_a_Private_Limited_Company\"><\/span>What are the Registration\nPrerequisite for a Private Limited Company? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following section explains the\nregistration prerequisites for a private limited company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Members\nand Directors<\/h3>\n\n\n\n<p>As mentioned earlier, the privately-held\nentity must possess a minimum of the two and a maximum of 200 shareholders,\nwhich is a regulatory prerequisite cited in the Companies Act, 2013. Every\ncompany seeking to be transformed into a private legal entity should meet this\nrequirement without exception. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\">How to Calculate the Members of a Company? <\/h4>\n\n\n\n<p>To calculate the number of shareholders in a privately held entity, the stipulations should be met. If two or more persons jointly hold the company\u2019s shares, they cannot be treated as an independent shareholder on that ground. ESOP, aka the employee stock ownership plan, is a way to issue equity to individuals working as a full-time employee. Such individuals are not a part of such a calculation. This doesn\u2019t include the company\u2019s existing or former employees who never serve as a member during the employment tenure.<\/p>\n\n\n\n<p>Likewise, a minimum of the two directors is\nrequired for the incorporation of a private limited company. The directors must\nsatisfy the given stipulations. The directors of the company must have DIN,\ni.e. director identification number issued by the MCA. At least one of the\ndirectors should be an Indian national, and he\/she should have stayed in the\ncountry for not less than 182 days in the preceding calendar year. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Name\nof the Company<\/h3>\n\n\n\n<p>Identifying the name of a company is a\ncomplicated task. Privately held entities should address the three aspects\ngiven below while selecting a name for them. <\/p>\n\n\n\n<ul><li>Main Name; <\/li><li>The task to be carried out in the company <\/li><li>Inclusion of the term \u2018Private Limited Company\u2019 at the end of the name of the company.&nbsp; <\/li><\/ul>\n\n\n\n<p>The applicant seeking a new name can visit the MCA\u2019s portal and use its particular services to identify the unique name. Keep in mind that companies cannot opt for the name that isn\u2019t unique or resembles other entities\u2019 names. In such a case, we suggest you forward 5-6 names to ROC for approval purposes. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Registered\nOffice Address<\/h3>\n\n\n\n<p>After successfully registering the company\u2019s name, the applicant needs to approach ROC for the registration of a place of business. The place of business is the vicinity where all the company\u2019s main tasks and responsibilities are carried out and where the official documents are placed. <\/p>\n\n\n\n<p>Availing digital signature certificate + professional certification \u2013 To submit the documents electronically, every firm should avail of a digital signature certificate to authenticate the documents. Also, a company should have comprehensive data of its employees along with a certification stating their qualifications.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_register_a_Private_Limited_Company\"><\/span>How to register a Private Limited\nCompany?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Once the company\u2019s name is finalized, the given instructions have to avail by the applicant.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/benefits-of-private-limited-company\/\">5 Eminent Benefits of Private Limited Company<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"New_SPICe_Form_for_Company_Registration\"><\/span>New SPICe+ Form for Company Registration&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>SPICe+ Form renders vital obligations for <a href=\"https:\/\/corpbiz.io\/company-registration\"><strong>company registration<\/strong><\/a> like name reservation, incorporation, DIN allotment, issue of PAN, ESIC, TAN, Profession Tax (Maharashtra), EPFO, and Opening of Bank Account. It must be noted that the GSTIN number can also be availed through <a href=\"https:\/\/corpbiz.io\/learning\/new-spice-plus-form-launched-by-mca\/\"><strong>SPICe + form<\/strong><\/a>.&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"640\" height=\"616\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-59.png\" alt=\"New SPICe+ Form for Company Registration \" class=\"wp-image-16349\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-59.png 640w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-59-300x289.png 300w\" sizes=\"(max-width: 640px) 100vw, 640px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documentation_Prerequisites_for_Online_Company_Registration_for_SPICe_form\"><\/span>Documentation Prerequisites for Online Company Registration for SPICe+ form<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following is the list of companies <\/p>\n\n\n\n<ul><li>Articles of Association (AOA)<\/li><li>Memorandum of Association (MOA)<\/li><li>Subscriber&#8217;s Declaration<\/li><li>Directors&#8217; Declaration<\/li><li>Proof Regarding the Office Address<\/li><li>Utility Bills (recent copy)<\/li><li>Copy of incorporation regarding foreign body\ncorporate [If applicable]<\/li><li>A recommendation in written form from the\n&#8220;Promotional Company&#8221; [If applicable]<\/li><li>Copy of a Resolution passed by the International\nCompany [If applicable]<\/li><li>Proof of interest of the directors from other\nLegal\/Political bodies [If applicable]&nbsp;<\/li><li>Nominee&#8217;s approval in the Format prescribed by\nthe authority.&nbsp;<\/li><li>Address proof as well as an Identity proof of\nthe subscribers and the nominees.<\/li><li>Identification proof of the applicant, along\nwith the residential address.&nbsp;<\/li><li>The Declaration or resolution from the\nUnregistered Company\/ies<\/li><li>Any other applicable document [If required]<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documentation_prerequisites_for_Online_Company_Registration_regarding_AGILE-PRO\"><\/span>Documentation prerequisites for Online Company\nRegistration regarding AGILE-PRO:-<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Address proof of the Principal Place of business operation<\/li><li>Appointment proof of Authorized Signatory regarding Goods and Services Tax Identification Number&nbsp;<\/li><li>Resolution copy or Letter of Authorization from the Board of directors.&nbsp;<\/li><li>The resolution copy authenticates by the managing committee, along with the acceptance letter.<\/li><li>Identification Proof of the Authorized Signatory for the purpose of opening of a bank account<\/li><li>Signature of an Authorized person for EPFO<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Prerequisites_for_Online_Company_Registration_regarding_Declaration_in_form_%E2%80%98INC-9\"><\/span>Prerequisites for Online Company Registration regarding\nDeclaration in form &#8216;INC-9&#8217;:-<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> The Declaration of the directors and subscribers are presented via the electronic medium in auto-generated in PDF format. The applicant seeking registration must furnish the certification and recommendation sanctioned by the professional, such as <a href=\"https:\/\/corpbiz.io\/learning\/the-role-of-the-company-secretary\/\"><strong>Company Secretary<\/strong><\/a>, Chartered Accountant, and Cost Accountant. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_that_work_as_address_proof_for_Online_Company_Registration\"><\/span>Documents that work as address proof for Online Company\nRegistration<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Voter Card<\/li><li>Passport<\/li><li>Aadhaar Card<\/li><li>Electricity Bill<\/li><li>Telephone Bill<\/li><li>Ration Card<\/li><li>Driving License<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_that_work_as_a_residential_proof_for_Online_Company_Registration\"><\/span>Documents that work as a residential proof for Online\nCompany Registration<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Bank Statement<\/li><li>Phone Bill<\/li><li>Electricity Bill<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The private limited business model is an obvious choice for most of the business entities and startups across pan India. It is easy to establish and operate as compared to public limited companies. where members are under tremendous legal pressure to maintain transparency without exception.&nbsp; <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/documents-required-for-private-limited-company-registration-india\/\">All you need to Know about Private Limited Company\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Although a Private Limited company is the antiquated business model, it is still preferred by thousands of entrepreneurs for its countless advantages and popularity. Unlike other business models, a private limited company seeks less compliance and offers better reliability.&nbsp; In this article, you will come to Know about Private limited company. A Private Limited Company [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":16358,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[999],"acf":{"service_id":"1"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":9409,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/16347"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=16347"}],"version-history":[{"count":14,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/16347\/revisions"}],"predecessor-version":[{"id":50734,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/16347\/revisions\/50734"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/16358"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=16347"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=16347"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=16347"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}