What is Private limited company?
As per Section 2(68) of the Companies Act, 2013, a Private Company means a company which by its articles (i) Restricts the right to transfer its shares. (ii) Except in case of one person company, limits the number of its members to 200 (iii) Prohibits any invitation to the public to subscribe for any securities of the Company. Where 2 or more persons hold one or more shares in a company jointly, they shall be treated as single member. Minimum of 2 members and 2 directors are required in a private limited company.
Private Limited Company registration is the most popular legal structure option for businesses in India. If you want to start a company in India then make sure your company is registered as Company Registration should be your first priority. It is very important to register your company as a registered company have multiple advantages from easy to register to easy to dissolve.
Start-ups and growing companies prefer private limited company as it allows outside funding to be raised easily, limits the liabilities of its shareholders and enables them to offer employee stock options to pull in top talent.
Private Limited Company Benefits
It is flexible and has limited liability
Greater capital contribution and greater stability
Possibility to grow big and expand
Documents Required For Company Registration
>>Copy of PAN Card of directors >>Copy of Aadhaar Card/ Voter identity card of directors >>Copy of Bank Statements of Directors
>>Copy of Rent agreement (If rented property) >>Electricity/ Water bill (Business Place) >>Copy of Property papers(If owned property)
>>Landlord NOC (Format will be provided) >> Consent and declaration from directors
Steps For Company Registration
The following process for company registration in India:
RUN Name Approval
Firstly name approval is obtained for the proposed company names from the Ministry of Corporate Affairs. Upto 2 names can be provided. In case of rejection of both names, an opportunity is provided for re-submission of the form with 2 more names.
Timeline: Name approval can be obtained in 1-2 business days.
Digital signature must be obtained for the proposed Directors of the Company. Digital signature is required for signing of the incorporation application. However, digital signature is not required for obtaining name approval. Hence, this process of obtaining Digital signature can run parallel to the name approval process.
Timeline: Digital signature can be obtained in 1-2 business days.
Incorporation Application Submission
On obtaining the Digital Signature, the incorporation application can be submitted in SPICe Form with the MCA. There is no requirement for obtaining RUN Name Approval for submission of SPICe Form. Hence, if RUN name approval was not obtained, if the name is available, the company would be incorporated. In case of non-availability of name, the incorporation documents must be resubmitted. Hence, its advisable to obtain RUN name approval before submission of SPICe Form.
Timeline: Incorporation application can be prepared and submitted in 1-2 business days.
Private Limited Company Incorporation
On submission of the incorporation application, private limited company incorporation certificate along with PAN and TAN is provided within 10-15 business days from the day of initiation of the company registration process with MCA.
Factors To Consider In Company Name Selection
The name of your company is very important. It is the first impression to your buyers, suppliers and stakeholders. It should, therefore, be relevant, suggestive and attractive. There are various factors that you should keep in mind while naming for your company.
Short & Simple
The name should be concise and not be too long. People should be able to pronounce it easily and they should be able to remember your company’s name the first time they hear or read it.
The name of your company should be related to your business. It should fit the company’s branding. For example, Infosys refers to information systems or IT technologies.
Name of your company should not be same or identical to an existing company or trademark. You can click here to check if your company name is identical to others. You should ideally avoid plural version e.g., “Flipkart’s” or changing just letter Case, spacing or punctuation marks in an existing company name.
The name of your company should end with the suffix “Private Limited” in a case of a Private limited company and “LLP” is a case of a limited liability partnership.
Should not be illegal / offensive
The name of your company should not be against law. It should not be abusive or against the customs and beliefs of any religion.