Are you planning to form a new private limited company of your own? If the answer is yes, then be prepared to face some crucial legal process mandatory for your business to acquire greater sustainability. Any private ltd company registration would attract various legal requirements to facilitate the work atmosphere in the future. Being an entrepreneur, the reason is obvious to focus more on sets and business launch than the legal procedure to register a company in India. For them, to whittle the worry away, an abundance of consultation professionals are available both online and offline and it is better to consult a legal practitioner to avoid any future hassle. This article would enlighten you about some fundamental processes on how to incorporate a private limited company in India.
Definition of a Private Limited Company
A private limited company is a company which is not a public company and which is registered as Private Company under Companies Act, 2013 and whose shares are privately-held. Private stakeholders are the sole part of these companies. Based on a limited liability framework in a private limited company, a shareholder has the liability only upto his shares. The scope of extension in a private limited company is limited as compared to a public company. These private limited companies have the Ministry of Corporate Affairs as their primary governing body. The rest of the article would make you familiar with the process of Private Limited Company registration.
Features of a Private Limited Company
To start a private limited company, a minimum number of two shareholders is necessary. But, as a private limited company is tagged as a small-scale entity, the maximum number of members can be 200 and it would help you to run your business efficiently. Adding to that, atleast two directors should be in-charge thereof the company.
Limited liability is one of the attractive features behind this craze of registering entities as a private limited company. The liability of the Shareholders towards the Company is limited only up to the amount of the share capital held by them. No personal stake is ever at risk if the company faces financial outbreak.
Requirements for Private Limited company Registration in India
Members and Directors
As mentioned above, as per the Companies Act, 2013, a company must have a minimum number of two directors and two shareholders to operate. Each Individual can act as Director cum Shareholder as well. Further atleast one of the directors must fulfill the criteria of being a resident of India.
Naming a company is a critical task indeed as the future growth in many aspects depends on the nomenclature. The more attractive and unique the name, the more the chances of attracting the clients. So, it plays a vital role. There are mainly three aspects to keep in mind while naming your company. The first one is the main name, the second one is the word related to the activities that the company would follow through and the third one is to mention the tag of ‘private limited company’ at the end of it and it is a minute but very vital part of a Private Limited Company registration.
MCA has come up recently with the process of reservation of Name through online form SPICE+ Part A. You can mention two names in order of preference in each application. If any of the two names are available, the MCA shall approve the same. However, in case none of the two names are available or due to some other defect in the application, the application is sent in resubmission, wherein you can apply with two new names or correct the defect as the case may be, and resubmit the application. Please note, hereafter the application shall be rejected if any defect continues and you will be required to file a fresh application with fresh fee of Rs. 1000/-.
e-MOA and e-AOA
e-MOA (electronic Memorandum of Association) and e-AOA (electronic Articles of Association) have been initiated by MCA to make the whole process smooth. The former one refers to the charter of the company while the latter one consists of rules and regulations of the company. Earlier, offline submission of these forms was necessary but, now the online availability for filing e-MOA and e-AOA is not at all difficult and both of these forms need to be digitally signed for verification.
Obtaining other documents
before we do get started, we’d like to provide you with some insights about the documents required for Pvt. Ltd. company registration. Let’s check them out!
1. A self-attested copy of both Aadhar Card and PAN Card (of all the subscribers and directors)
2. Passport-size photograph
3. A self-attested copy of legal Identity Proof (either your Passport or Voter ID card or Aadhar Card or driving license)
4. Proof of the address of the office (Utility Bill not older than 2 months and NOC from the owner of premises or Rent Agreement papers)
5. Residential proof that isn’t older than two months (either your Electricity Bill or Mobile/Telephone Bill or Bank Statement)
6. The e-mail address and the phone number of the director alongside some other basic details
7. Sample signature of the Authorized Signatory for registering under Agile Pro
So, these are a few of the documents that you would require to set up a Pvt. Ltd. company registration in India.
Steps to follow for pvt ltd company registration
The process of Pvt ltd company registration in India is not a matter of headache. By following some simple procedure, you can venture into your aspiration to be a successful entrepreneur.
The newly introduced procedure of company registration provides ten different services, which are:
- Name Reservation
- DIN allotment
- Incorporation of a new company
- Profession Tax (in Maharashtra)
- Bank Account Opening
Therefore, in a way, it does save a lot of time, cost and procedures for starting a private limited company registration.
Anyways, let’s get back to our 6 golden steps of beginning your life as an entrepreneur. Let’s get started.
1. Acquiring a Digital Signature
Before you do anything else, the first thing, which you need to acquire to start your own company, is the DSC (Digital Signature Certificate) of the Director and Subscribers to MOA.
You can obtain the Class – 2 DSC from the CAs or Certifying Authorities. However, before you do so, make sure to keep your original supporting documents (passport-size photo, PAN card, Address proof, etc,) as well as some self-attested copies of them.
2. Giving an Application for Name Approval
Once you are done with the DSC procedure, then you will have to make an application in the Form SPICE + A. It will help you to reserve a distinctive name for your organization. The new sections that have been included in the form are:
- Type of the company
- Class of the company
- Category of the company
- Subcategory of the organization
- The main division of the industrial activities of the company
- Analysis of the main division
- Particulars of the Proposed Name (a maximum of two)
3. Filling Up of the Online Form SPICE + Part B
After the Name has been approved, you will have to fill up the Form SPICE + Part B. Here, you will have to provide all the fundamentals with respect to the Director and Promoters of the company, it’s Registered Office, and Share Capital details. Alongside this, you would also have to apply for PAN and TAN for your organization. After scrutinizing and submitting the form online, you’ll have to fill up four new forms, which are – INC – 9, Agile Pro, Spice AOA, and Spice MOA.
The INC-9 form, which mainly deals with the shareholders and the directors, is generated automatically with all the complete details through Form Spice Part B.
4. Submitting Form Agile Pro
With this form, you can apply for the registrations under EPFO, GST, Bank Account Number, ESIC, and Professional Tax. Keep in mind that the registration under Bank Account opening, EPFO, and ESIC is mandatory with company registration. Nonetheless, the Professional Tax Registration will only be mandatory if your company has a registered office in Maharashtra. Lastly, GST registration is optional.
The submission of Form Agile Pro will be verified by an OTP, which will be sent on the registered mobile number and e-mail ID. Once this step of private limited company registration is over, you will, then, move on to the next step, which is SPICE AOA and MOA.
5. Formulation of MOA and AOA
The Form of INC-33 caters to MOA (Memorandum of Association), while the INC-34 Form refers to AOA (Articles of Association). The MOA of an organization mainly talks about its scope of operations. On the other hand, AOA states how the company will carry the operations while following the laid Act.
It is actually one of the easiest steps in private limited company registration. However, keep in mind that the MOA and AOA need to be physically signed if the company has any foreign subscribers.
6. Summing Up Everything
After you have submitted all the forms thoroughly, you will, then, download them, affix the DSCs on each of them, and upload them together as linked forms.
So, these are the steps that you need to follow to finish your private limited company registration in a proper and correct manner.