Articles

Formation of Private Limited Company in India

by Gaurav Bansal Company Registration Consultants in Delhi

Private Limited Company is one of the most suitable business vehicles for the thousands of aspiring entrepreneurs. Any entrepreneur can simply form his private limited company by following certain simple steps.

With so much exposure and technological advancements, millions of novel ideas are budding in India every day. Many of these are brought into reality by creating a company for them. However, the majority of them stays in imaginations only due to lack of adequate guidance.  However now you can seek guidance from number of portals to seamlessly incorporate your company.

Even if your idea is magnificent and you have 100 % confidence in its success there are always chances of its failure. Thus it is always recommended for a person to put a limit on his liability and protect its assets. The best way to limiting your liability is to create a private limited company.

What is private limited Company?

A private limited company is the privately held small business that can be incorporated by minimum 2 and maximum 200 members.

Benefits of private limited company

Private Limited Company is one of the most preferred business structures in India and has gained a lot of popularity in the recent years. Do you what is the reason behind it?  The reason for the increasing popularity of this business structure among the entrepreneurs is the multiple benefits associated with it. Below we have outlined some of these benefits of the private limited company-

1. Limited Liability- One of the major benefits of the private limited company is that the liability of the members of the private limited company is limited to their shares only. Due to this the personal assets and the income of the shareholders are protected at the time of crises.

2. Separate Identity- The legal identity of the private limited company is separate from its members. Thus, the company is empowered to sue and be sued on its own.

3. A Number of members and shareholders- To incorporate a private limited company only two members and two shareholders are required. This makes it easy for the entrepreneur to start a business.

4. Tax Benefits- Private Limited Companies are only taxed on their profits and are not subject to the higher (personal) tax rates that are placed on sole traders or partnerships.

5. Perpetual Succession- As the Private limited company is a separate legal entity from its members thus its life is not affected by the death of its members.

Now as you are well versed with the benefits of private limited company you may desire to proceed with the registration procedure. In the section below we have listed out the documents required and the procedure of the private limited company registration in India. Let us take a look at it.

Documents required for registering a Private limited company

    Copy of Pan Card self- attested

    Copy of Voter Id card/ Driving License/Passport self-attested.

    Copy of address proof (Electricity bill, phone Bill documents should not be older than 2 months)

    Photographs of Director’s

    For the Company Address proof (Electricity Bill, Telephone Bill, Mobile Bill or Gas Bill AND Rent Agreement (If Rented)) AND NOC for doing Business & for taking Registration.

The procedure of obtaining Company registration in India

Step-1-Applying for DIN (Director’s Identification Number)

Every person who intends to act like a director in any Indian company is required to obtain their Director’s identification number. Thus the proposed directors of the company are required to file an electronic Form DIN-3 that is available on the Official site of the ministry of corporate affairs.

Step 2: Obtaining Digital Signature Certificate (DSC)

According to information act 2000, every document submitted electronically for the purpose of company incorporation shall contain a valid digital signature on them. This provision is made in order to ensure safe submission of the required documents electronically. The digital signature certificate should be acquired from only those agencies which are appointed by the controller of certification agencies (CCA). One should not use DSC given by any other agency which is not approved.

 The Digital signatures can be acquired from the government listed agencies like TCS, IDBRT, MTNL, SAFESCRYPT, NIC, nCODE Solutions etc.

Step 3: Obtaining name approval by filing run

 If the proposed company desires to apply for some generic names it is advisable for them to file Run form and obtain name approval in advance. However, if the company deems that the name chosen by it is completely distinct and possess some unique characters then it can apply for name approval directly with spice.

Step- 4 Filing of electronic forms

Through this step the applicant is required to file electronic forms relating to incorporating company name, registering the office address or notice of situation of office and notice for appointment of company directors, manager and secretary also regarding the take and pay for their qualification shares. The forms for these purposes are as follows-

SPICE 32- Through this form, the details relating to incorporating company name, registered office address or notice of situation of office, PAN TAN details and notice for appointment of company directors, manager and secretary and also regarding the take and pay for their qualification shares are provided.

INC-33- Through this form, the Memorandum of association (MOA) of the company is filed. Memorandum of association is a document which defines the relationship of the shareholders with the company. It basically contains the objectives and powers of the company.

INC-34- In this form, the article of association of the company is filed. AOA is the bye-laws which define the relationship of the company with outsiders. Information such as the total number of members, share capital, rules for a meeting of the company, voting power of members must be included in the Articles of Association.

Step-5- Certificate of incorporation

After the careful scrutiny of the application and document submitted the MCA may grant the certificate of incorporation to the proposed company. Further, the applicant will receive a confirmation email regarding the application for incorporation of a new company, and the status of the form will be changed to Approved.

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About Gaurav Bansal Senior   Company Registration Consultants in Delhi

157 connections, 3 recommendations, 762 honor points.
Joined APSense since, February 18th, 2016, From Delhi, India.

Created on May 1st 2018 01:26. Viewed 387 times.

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