What is Private Limited Company Registration
A private Company registration in India is one of the most popular business registrations among the small, medium, and large enterprises in India. Start-ups and businesses with higher growth aspiration popularly choose Private Company registration as a suitable business structure. A private Company Registration is a company which as a minimum 2 and maximum 50 members present. A private Company Registration must have minimum paid-up capital of Re. 1 or such higher amount as may be prescribed from time to time and has restricted the right of a member to transfer its shares. A private Company Registration doesn’t invite the public to subscribe its share capital. It is mandatory to use the word “Private Limited’ at the of the name of the Private Limited company registration in India. This form of company has many benefits such as no interference of public or government, no requirement for the issue of the prospectus, separate legal existence from its members, can enter into a contract in its own name. Also, a Private Company registration is eligible to take benefit of registration under the Startup India Scheme of the Government of India. This scheme avails multiple benefits including tax exemptions for the recognized startups.
Benefits of Private Limited Company Registration in India
Distinct Legal Entity
The greatest benefit of private limited company registration is that it is treated as a single entity in which the company is responsible for all the debt payments. The company is liable for any shortcomings, its members are not personally affected, they are only responsible for unpaid shares. A private limited company registration has separate legal entity from its owners which safeguard the owner from being sued in case of any legal controversy.
Tax Savings
By registering a Private Limited Company, there are many ways in which you can have extra monetary benefits by saving tax. There are some tax planning tips that every Private Limited Company registration considers to fill its pockets a little high. Salary to the director is an allowable expense for the Private Ltd Company registration. All preliminary expenses like drafting of MOA and AOA, stamp duty printing of documents, etc. are also allowed as expenses. Private Ltd Companies are taxed at a rate of 22% with a surcharge of 10% and cess of 4% making the effective tax rate as 25.17% which is lower than LLP Registration which is taxed at 30%.
Brand image
Registering a Private Limited company gives a brand image to business compared to running a business as a sole proprietor. Generally, large business firms prefer to deal with companies instead of sole proprietor firms. There might be a requirement of tender or job work, which can be applied only by the company.
Easy Fund Raising
A private limited company registration enjoys a better option for borrowing funds. It can issue debentures secured as well as unsecured. Banks and other financial institutions also prefer giving financial assistance to large private firms.
Eligibility For Private Limited Company registration in India
step1: Application for Name Approval
Name of private limited company registration is a crucial step for new company registration. Two proposed names in order of preference, objective/purpose of business activity along with statutory fees are submitted to MCA. The proposed name should be unique and shouldn’t have punctuation marks. In case MCA has any observation, then the word comes for resubmission, which delays the whole process. Once the name is approved, it is valid for 20 days (including weekends or other holidays), and all other formalities must be completed within this period.
Step 2: Digital Signature Certificate Application
Digital Signature is an online signature used for filing documents online. Digital Signature Certificate (DSC) is required for all shareholders and directors for private limited company registration. It can be applied in parallel with applying for name approval as there is no DSC requirement in the name application. If the director or shareholder of the private limited company registration already has DSC, this step can be skipped.
step 3: Documents Preparations and Filling of Forms
After getting DSC and name approval, the next step is to file forms- Spice + Part, Agile Pro, Spice MOA, Spice AOA, and INC 22 forms with MCA. These forms consist of information regarding private limited company registration such as registered office, authorized, paid-up capital, shareholding pattern, directors, shareholders details such as an address, education qualification, etc. Some of this information is required to be supported required proof like rent/title deed of registered office, PAN card, etc.
Step 4 : Getting Incorporation Certificate
After submitting all the documents and getting verified by the Registrar of Companies (ROC), you will receive a Certificate of Incorporation within 7-12 days. This certificate of incorporation will act as a birth certificate for your company registration, and the company registration process ends here. The certificate of incorporation will consist of name, registered address, 21 digits alpha-numeric number Corporate Identity Number (CIN) approved by MCA, and notified on the registered companies.
Step 5: Opening Bank Account
After getting the Incorporation certificate for private limited company registration, a bank account needs to be opened in the name of your company. One needs to submit an incorporation certificate, MOA, AOA, and other necessary documents required by the bank. Before the commencement of business, proposed paid-up capital must be deposited with the bank, and INC-20A needs to be filled with MCA to get the certificate of commencement.
Documents Required for Private Limited Company Registration in India
For each Directors and Shareholders:
- Passport Size Photograph
- PAN Card
- Aadhar Card
- Voter ID/ Passport/ Driving License
- Telephone /Electricity Bill/ Bank A/c Statement (Not older than 2 Months) *
- Passport Size Photograph
For address Proof of new company
- Telephone /Electricity Bill/(Not older than 2 Months)
- Tittle/Sale – Owned Property
- Rent Agreement – Rented Property
- NOC – Rented Property
- Telephone /Electricity Bill/(Not older than 2 Months)
Additional Requirement For Foreign Nationals
- Passport *
- Documents should be notarized or consuralized or apostilled
- Passport *
How much time period required to register Company Registration online
Step 1.
1-2 Days
Obtaining requisite Documents and information
Step 2.
1-2 Days
Obtaining DSC
Step 3.
1-2 Days
Filing of Requisite forms with ROC
Step 4.
2-3 Days
Certificate of Incorporation
The Private Limited (Pvt Ltd) company registration online takes up to 14 days*. The steps include name application, which we do on the same day as the engagement. Another workstream of the TaxLane Corporate Services team starts with DSC registration and collecting the KYC documents. In the meantime, the name for company registration comes, and we proceed with filling out the final form. The entire process is done in a well-coordinated manner, which makes it very efficient and completely paperless. Once company registration is complete, the team assists in opening a bank account, doing GST Registration and other formalities.
Note: Depends on proper working of MCA Website