Minimum two shareholders
Minimum two directors
At least one designated partner to be Indian Resident
Investing the capital within 2 months of incorporation
Filing Application form
Obtaining DSC and DPIN for 2 Directors
Verification and Name Approval
Drafting of necessary documents and their Submission with the Concerned Authority
Completion and Delivery of Documents
PAN Card of the Company Registered
Copy of Pan Card of Directors
Copy of Aadhaar Card of Directors
Passport Size Photographs
Copy of ownership proof/rent of property
Landlord NOC (if Rented)
Private Limited Company is the most prevalent and popular type of corporate legal entity in India. Private limited company registration is governed by the Companies Act, 2013 and the Companies Incorporation Rules, 2014. To register a private limited company, a minimum of two shareholders and two directors are required. A natural person can be both a director and shareholder, while a corporate legal entity can only be a shareholder.
- Separate Legal Entity – Private Limited Company is a separate legal entity and a juristic person established under the Companies Act. Hence, the members (Shareholders/Directors) of a company have no personal liability to the creditors of a company for it’s debts.
- Uninterrupted Existence – Private Limited Company has ‘perpetual succession’, meaning uninterrupted existence until it is legally dissolved. A company being a separate legal person, is unaffected by the death or other departure of any member and continues to be in existence irrespective of the changes in ownership.
- Easy Transferability – Ownership of a business can be easily transferred in a company by transferring shares. The signing, filing and transfer of share transfer form and share certificates are sufficient to transfer ownership of a company. In a private limited company, the consent of other shareholders may be required to effect share transfers.
- Borrowing Capacity – Private Limited Companies can raise funds in India via issuing equity shares, preference shares, debentures or by accepting deposits with RBI permission. Banks and Financial Institutions prefer to provide funding to a company rather than partnership firms or proprietary concerns.
- Owning Property – Private Limited Company being an artificial person, can acquire, own, enjoy and alienate, property in its name. The property owned by a company could be machinery, building, intangible assets, land, residential property, factory, etc., No shareholder can make a claim upon the property of the company – as long as the company is a going concern.
- Short and Simple
- Not offensive/illegal
Sole Proprietorship – A Single person can start a sole proprietorship business. There is no legal registration of proprietorship; it is registered based on GST. New Customers and suppliers generally do not trust your brand easily. The proprietor is personally responsible for the liabilities of the business.
Private Limited Company – Two persons are required to incorporate, however if there is a single person, he may choose to register a one person Company (OPC). It is an organized form of business and registered under the Companies Act, 2013. Since it is a registered form of business, it offers more trust to the customers/suppliers etc. Personal assets of the shareholders/owners are safe, except in the case of a fraud.
Yes, you need a minimum of two directors for a private limited company. The maximum members can be 200.
Any individual/organization can become the member of the private limited company including foreigners/NRI. However, the individual must be 18+ above in terms of age and should have a valid PAN card.
There is no requirement of minimum capital, as the government has done away with the requirement of having the minimum share capital. Now any person can form a private limited company with any amount as per his choice.
It takes around 10 to 15 days to register company if all the documents are provided on time.10 to 15 days is an average time taken to complete all the formalities. In some cases, it can be fast tracked to about a week.
Once the private limited company is formed, there are various documents which are required for bank account opening. The lists of documents required for opening the bank account are as follows:
Certificate of Incorporation
PAN Card Acknowledgement
Memorandum of Association (MOA)
Articles of Association (AOA)
Board Resolution as per the format given by Bank
Bank Account opening form as per respective bank.
Shareholders are the person who holds the shares of the company and are considered as the owners of the company. The more the number of shares you hold, the more you have control over the business.
Directors, on the other hand, are the employees of the company and run the company on behalf of the shareholders. Directors and Shareholders can be common persons too.
Private Limited Company Registration is the first step to start your business in India. It provides you basic identity and basic documentation based upon that you can do multiple activities like an opening bank account, taking space on lease, etc. Here are some major advantages of Private Limited Company Registration:
* It helps you to raise funding from Venture Capitalists, Angel Investors, High net worth individuals, etc.
* It protects your personal assets by limiting your liability.
* It provides separate legal entity status
The disadvantages of private company registration are as follows:
* It increases your yearly compliance cost, as the Audit of a Private Limited Company is mandatory even in the case of zero turnover.
* Doing business under Private Limited Company is not flexible as there are too many regulations to comply with.
* There is always a risk of high penalties in case you do not comply with the Companies Act, 2013.
Yes, you can upgrade your existing business into a corporate identity. However, your business can be converted into the private limited company which is a complex procedure. You can contact our executive for further knowledge on this procedure.
Yes, as per the existing provisions of law, it is possible to register a company in India without even visiting India. In this case, all the documents of the NRI or the foreign national is notarized at the notary public or at the Indian embassy as per the respective requirement of the country.
Yes, a NRI or a foreign national can become the director in a private limited company, subject to the condition that out of all the directors’ atleast one director should be a resident in India for more than 182 days.