Stepping into the Corporate World is a daunting process. One must choose that Business Model which is easy to incorporate and provides limited liability. Such business structure is popularly known as the Private Limited Company. In India, about 95% of organizations are Private Limited Companies. Therefore, it indicates that a large number of start-ups are inclined to form a Private Limited Company. If you also want to build one, apply for Private Limited Company Registration. In case you are clueless about the procedure, then this write-up can act as a guide for you.
Key aspects of a Private Limited Company:
Here are some primary factors of a Private Limited Company:
- One needs to have at least 2 members and maximum 200 members to start a Private Company as per the provision of Companies Act 2013.
- A Private Company has a separate legal entity from its members. Therefore, the entity keeps on existing even after the bankruptcy, insolvency or death of any of its members.
- There is no minimum Paid Up capital required for a Private Limited Company.
- The liability of each member or a shareholder in a Private Company is limited. It implies that in case the Company incurs any losses, then the personal assets of its members or shareholders are not at stake.
- Unlike a Public Company, a Private Limited Company does not require to maintain an index of its members.
- Private Companies are not obliged to issue Company’s Prospectus as they don’t invite the general public for subscription of the Shares.
- All Private Limited Companies must use the term Private Limited in the suffix of their names.
- Private Companies must comply for the transferability of shares according to Companies Act, 2013.
- A Private Limited Company cannot raise funds from the public and it can only avail loan or credit from the banks.
Prerequisites for Private Limited Company Registration:
These are some mandatory provisions that an applicant has to fulfil before applying for Company’s Registration:
- A Private Limited Company must have minimum and maximum 2 and 200 members respectively during Registration.
- The Company should have at least 2 Directors out of which one must be a resident of India in the previous calendar year.
- It essential to obtain a Digital Signature Certificate (DSC) that will be used later for document verification.
- The applicant has to provide 2 names for the proposed Private Company which should be unique and express the nature of the business.
Online process of Private Limited Company Registration :
Follow the steps given below to register a Private Limited Company:
- Attain DSC- As mentioned earlier; all the Directors and Shareholders first have to procure a Digital Signature Certificate that is required to sign Application Forms electronically.
- File an Application for DIN- The Directors must have a unique Director Identification Number for which one needs to file eForm DIR-3 on the official MCA website.
- File RUN Form- Provide two names for your Private Company by filling RUN Form and check the name availability online. Thereafter, pay the name approval fee of INR 1000.
- Submit Incorporation Form– After getting the name approval, the applicant now has to fill SPICe Form (INC-32) for Company’s Incorporation. Also, fill INC-32 Form to avail PAN & TAN.
- Assessment of the documents– Registrar of Company will verify the Application and the provided documents.
- Grant Registration Certificate– If the Registrar feels that the provided information is valid and true, he will issue the Private Limited Company Registration Certificate. The Registrar will also provide PAN, TAN and CIN to the newly established Company.
Once you are done with Private Limited Company Registration procedure, open a bank account on your Company’s name.
Private Limited Company is a highly beneficial Business Model for all the newbies of the Corporate Industry. It gives flexibility to the entrepreneur to set the Company with least capital and maximum benefits. Consult Swarit Advisors for legal guidance in Private Limited Company Registration.