Company Registration in India
If you’re looking to embark on a business venture in India, setting up a private limited company is like putting on a shiny suit of armor. With limited liability for shareholders, it offers a shield of protection against any unforeseen obstacles. But like any suit of armor, there are restrictions on who can wear it – only those who meet the requirements can don this protective gear.
On the other hand, an LLP is like a partnership dance. The partners are the choreographers, setting the direction and rhythm for the business. It’s a collaborative effort where everyone has a say in the company’s management and success.
So, if you’re ready to take on the challenge of starting a business in India, you have two options – put on the armor of a private limited company or join the dance of an LLP.
A Private Limited Company (PLC) is one of the most popular types of companies in India that is regulated by the Companies Act, 2013. To register a PLC in India, you need to have a minimum of:
- 2 Directors, with one being an Indian resident and citizen
- 2 Shareholders, who can also be Directors
- A registered office in India
Benefits of Private Limited Company Registration
- Making your business more authentic
- Protecting you from personal liability and risks
- Attracting more customers
- Making it easier to get loans and investments from reliable sources
- Protecting your company’s assets
- Perpetual succession
- Providing more stability and potential for growth and expansion
Eligibility to Register a Private Limited Company
- Minimum 2 Directors and Maximum 15 Directors
- Minimum 2 and Maximum 200 Shareholders
- At least one Director must be an Indian Resident
- Valid DIN for all Directors
- DSC required for all Directors
- Company name must end with 'Private Limited'
Checklist for Private Limited Company Registration in India
- Creating a private limited company in India is a straightforward process, but you need to ensure that you follow the checklist requirements as defined by the Companies Act, 2013:
- You need at least two directors, a unique name, an authorised capital of ₹1 lakh, and a registered office (Don’t worry, the registered office can even be your rented home!)
- By registering your company, you gain authenticity, protection from personal liability, and the potential to attract more customers and investments.
Private Limited Company Registration Timeline
- DSC & DIN – 1 to 2 days
- Name Approval – 2 to 5 days
- SPICe+ Filing – 2 to 3 days
- Certificate of Incorporation – 3 to 5 days
- Total Time – 7 to 15 working days
Steps for Private Limited Company Registration
Step 1: RUN Name Approval
The initial stage of company registration is called the RUN Name Approval process. This involves reserving a unique name for your company by submitting a request to the Ministry of Corporate Affairs (MCA). You can suggest one or two names along with a brief description of your business goals in the application. If the MCA rejects the name, you can submit one or two more names. The MCA usually approves name requests within 5 business days.
Step 2: Get Directors’ Digital Signature Certificate (DSC)
In India, regular signatures are not accepted by the Ministry of Corporate Affairs (MCA). Hence, it is necessary to use a digital signature certified by an Indian certification authority for all filings with the MCA. Before incorporating the company, the Directors must obtain digital signatures.
We will help the Directors obtain a DSC from a recognized certifying body. They need to submit their identity documents and complete a video KYC process to get the digital signature. If a Director is a foreign national, their provided passport and other documents need to be apostilled by a nearby embassy
Step 3: Submitting the Company Incorporation Application
After obtaining the required digital signatures, the next step is to submit the company incorporation application in SPICe form along with all necessary documents to the MCA. The application must also include the Memorandum of Association (MOA) and Articles of Association (AOA). Upon review and acceptance by the MCA, an incorporation certificate and PAN for the company will be issued. The entire process usually takes less than five working days for approval.
Documents Required
- Scanned copy of PAN card or passport (for foreign nationals and NRIs)
- Scanned copy of voter ID/passport/driving license
- Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
- Scanned passport-sized photograph and specimen signature (blank document with signature for directors only)
- Proof of Registered Office
- Scanned copy of notarized rental agreement in English
- Scanned copy of no-objection certificate from the property owner
Post-Incorporation Requirements
- Open Current Bank Account
- Deposit Share Capital within 180 days
- Issue Share Certificates
- Appoint First Auditor
- Maintain Statutory Registers
- File INC-20A
- Apply for GST (if applicable)
Private Limited Company Compliances
- Get your finances right: Appoint a practising, certified, and registered Chartered Accountant (CA) within 30 days of incorporation and file the annual income tax return using form ITR-6 with the Director’s digital signature.
- Verify your identity annually: Submit DIN KYC to verify the phone number and email address on file with the MCA each year.
- Deposit subscription and create a bank account: The shareholders must deposit the subscription amount within 180 days of incorporation and create a bank account for the company to receive the business incorporation certificate.To obtain a business incorporation certificate, shareholders of a company with a paid-up capital of ₹1 lakh must deposit the same amount in the company’s bank account and furnish the MCA with a copy of the bank statement.
- Stay compliant: File MCA Annual Filings each financial year, including Forms MGT-7 and AOC-4, and ensure the documents are digitally signed by the Directors and a working professional.
- Income Tax Filing: Each financial year, companies are mandated to file their income tax returns using ITR-6 form. Income tax filing must be completed by the deadline for each financial year, irrespective of the incorporation date. The company’s income tax return must be digitally signed by a director.
Private Limited Company vs LLP vs OPC – Comparison Table
| Particulars | Private Limited Company | LLP | One Person Company |
|---|---|---|---|
| Ideal for | Businesses having high turnover and entrepreneur who need external source of funding. | Service oriented business that have low investment needs. | Proprietor looking to limit liability and wants 100% control over the business. |
| Minimum Share Capital | No minimum requirement | No minimum requirement | No requirement for minimum share capital. If capital exceeds 50 lakhs, OPC gets converted to Pvt. Ltd. |
| Members Required | Minimum 2 | Two designated partners | Minimum 1 |
| Directors Required | Minimum 2 directors | 2 designated partners | 1 director |
| Statutory Audit | Compulsory | Not compulsory unless partner’s contribution is above 25 lakhs or annual turnover exceeds 40 lakhs It is optional unless the partner’s contribution is over 25 lakhs or the annual turnover exceeds 40 lakhs. | Compulsory |
| Liability of Partners/Directors | Limited | ||
| Foreign Direct Investment | Eligible via automatic route | Not eligible for FDI | |
| Income Tax Rate | 25% | 30% | 25% |
| Statutory Compliance | High | Low | Moderate |
| GST Registration | In case of service if turnover exceeds 20 lacs | Same as Pvt Ltd | Same as Pvt Ltd |
Private Limited Company FAQs
What are the rules for picking a name for a private limited company?
To register a private limited company in India, the Registrar of Companies (ROC) has some naming guidelines that should be followed. Although some guidelines are subjective, adhering closely to the rules increases the chances of approval. Before applying, make sure the desired name is available.
How much time is needed for setting up a private limited company in India?
If all your documents are in order, the company setup process in India can be completed within 15 days, depending on the registrar’s workload.
Do I need to be physically present during this process?
The process is entirely online, so physical presence is not required. Instead, you would need to submit scanned copies of all necessary documents and forms.
What documents are required to complete the process?
Directors must provide ID and address proof, PAN card (for Indians) and passport (for foreigners). Owner of registered office must submit a no-objection certificate.
Does a private limited company have continuous existence?
As long as you fulfill the annual compliances, your private limited company will remain in existence. Failure to meet these requirements will result in dormancy and eventual removal from the register.
Is it necessary to have a company’s books audited?
A private limited company must appoint an auditor within 30 days of incorporation, regardless of its revenue. Non-compliance can result in penalties and blacklisting of directors.
What are Articles of Association (AOA) and Memorandum of Association (MOA)?
These documents outline your organization’s rules, vision, and mission, as well as defining the business and outlining the roles and responsibilities of shareholders and directors.
Can one register a private limited company on their home address?
The company can be registered using the owner’s residential address, provided that a copy of the utility bill is submitted as proof.
If there are no partners available, then can one register their family members in the company?
Definitely! It is never a stale idea to register a family member as a partner initially, as the director’s shares can be transferred or changed at a later stage.
Can NRIs/foreign nationals become directors in a private limited company?
A NRI or foreign national can be a director and hold a controlling stake in a private limited company, provided they obtain a DIN from the Indian RoC. However, the board of directors must have at least one Indian resident.
Why Choose Our Service?
- End-to-end support
- Fast MCA filing
- Affordable pricing
- Expert compliance guidance
- Post-incorporation support