How to Register a Private Limited Company Easily

Learn how to register a private limited company in India with this easy-to-follow guide. Covering steps from obtaining DSC and DIN to filing forms and meeting compliance, ensuring a smooth registration process.

Registering a private limited company in India is a popular choice for startups and entrepreneurs due to its numerous benefits, including limited liability, separate legal identity, and ease of raising funds. This guide will provide a detailed, step-by-step process to register a private limited company registration easily and address frequently asked questions (FAQ) to clear any doubts you might have.

Private Limited Company

A private limited company is a type of business entity privately held by a small group of people. It is a separate legal entity with perpetual succession, which means that the company continues to exist regardless of changes in ownership. The liability of the shareholders is limited to their share capital, making it a preferred choice for businesses looking to protect personal assets.

Benefits of Registering a Private Limited Company

1.Limited Liability: Shareholders' personal assets are protected; they are only liable for the company’s debts up to their shareholding amount.

2.Separate Legal Entity: The company is distinct from its owners, allowing it to own property, sue or be sued, and enter contracts in its name.

3.Perpetual Succession: The company continues to exist even if the shareholders or director’s change.

4.Ease of Raising Capital: Private limited companies can raise capital by issuing shares to investors.

5.Credibility: Being registered under the Companies Act of 2013, it boosts the credibility and trustworthiness of the business.

Step-by-Step Guide to Registering a Private Limited Company

Step 1: Obtain Digital Signature Certificates (DSC)

Digital Signature Certificates (DSC) are required for the electronic submission of forms on the Ministry of Corporate Affairs (MCA) portal. All proposed directors and shareholders need to obtain DSCs from government-approved certifying authorities.

Documents Required:

-Passport-sized photograph

-Self-attested copy of PAN card

-Self-attested copy of address proof (Aadhar, passport, voter ID, etc.)

Step 2: Apply for Director Identification Number (DIN)

A Director Identification Number (DIN) is mandatory for all directors of the company. You can apply for DIN through Form DIR-3 on the MCA portal, which requires personal details, identity proof, and address proof of the directors.

Step 3: Name Approval through RUN or SPICe+

Choosing a unique and appropriate name for your company is crucial. The company name must not resemble any existing company or trademark. You can apply for name approval via the Reserve Unique Name (RUN) service or directly within the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form.

Name Guidelines:

-Ensure the name is not identical or like an existing company.

-Avoid prohibited words and ensure the name is not misleading or offensive.

-The name must include “Private Limited” at the end.

Step 4: Preparation of MOA and AOA

The Memorandum of Association (MOA) defines the objectives, scope, and mission of the company, while the Articles of Association (AOA) outline the rules and regulations for the company’s operations. These documents need to be drafted in compliance with the Companies Act, 2013.

Step 5: Filing SPICe+ Form

SPICe+ is an integrated form for company incorporation and other related services such as PAN, TAN, GSTIN, ESIC, EPFO, and more. The form has two parts:

-Part A: Name reservation.

-Part B: Incorporation, DIN application, and mandatory registrations for EPFO, ESIC, GST, and professional tax (if applicable).

Required Documents for SPICe+ Form:

-Identity Proof: PAN card for Indian nationals, passport for foreign nationals.

-Address Proof: Aadhar card, passport, driving license, or utility bill (not older than two months).

-Proof of Registered Office Address: Utility bill (electricity, gas, water, etc.), rent agreement (if rented), or property ownership document.

Step 6: Payment of Fees and Stamp Duty

The fees for incorporation are based on the authorized share capital of the company and vary by state. You will need to pay these fees and applicable stamp duties at the time of filing the SPICe+ form.

Step 7: Certificate of Incorporation

Once the Registrar of Companies (ROC) verifies the submitted documents and forms, the Certificate of Incorporation (COI) is issued. The COI includes the Corporate Identity Number (CIN), marking the official formation of the company.

Step 8: PAN and TAN Application

PAN and TAN applications are processed alongside the incorporation form via SPICe+. These are essential for tax-related activities and statutory compliance in India.

Step 9: Opening a Bank Account

After obtaining the Certificate of Incorporation, you can open a current bank account in the name of the company. You will need the incorporation certificate, PAN, and other KYC documents for this process.

Post-Incorporation Compliance

1.Commencement of Business: File a declaration of commencement of business using Form INC-20A within 180 days of incorporation.

2.Maintaining Statutory Registers: Keep registers of directors, members, share certificates, and other records as per the Companies Act.

3.Accounting and Compliance: Regularly file annual returns, financial statements, and other mandatory filings with the MCA.

4.Annual General Meetings: Hold annual general meetings (AGMs) and board meetings as per the statutory requirements.

Conclusion

Registering a private limited company in India is a structured process that offers significant benefits to entrepreneurs and businesses. By following the outlined steps and ensuring compliance with legal requirements, you can set up your company efficiently and with minimal hassle. Whether you're starting your entrepreneurial journey or expanding your business, a private limited company provides a strong foundation for growth and success.

Frequently Asked Questions (FAQ)

1.How long does it take to register a private limited company?

The registration process typically takes 10-15 working days, depending on the availability of all documents and the efficiency of the ROC in processing your application.

2.What is the minimum capital requirement to start a private limited company?

There is no minimum capital requirement for registering a private limited company in India. You can start with any amount of capital as decided by the shareholders.

3.Can a private limited company be owned by one person?

A private limited company requires a minimum of two shareholders and two directors. However, if you want a single owner, you can opt for a One Person Company (OPC).

4.What is the difference between an OPC and a private limited company?

An OPC is a company that can have only one director and one shareholder, while a private limited company requires a minimum of two directors and shareholders. OPC is suitable for solo entrepreneurs, whereas a private limited company is better for businesses planning to scale or raise funds from investors.

5.Do I need a physical office to register with a private limited company?

Yes, a registered office address is required for company registration. This address will be used for all official communications. It can be a residential address as well.