Private Limited Company
In India, a Private Limited Company stands out as a most popular business structure regulated by the Companies Act, 2013. Private Limited Company is a privately held business entity and Company is privately held by the shareholders & the maximum number of shareholders shouldn’t be more than 200. Similarly, the liability arrangement in a Private Company is that of a Limited Partnership, wherein the shareholder’s liability extends only up to the number of shares held by them. Usually, a Private Company in India doesn’t offer or trade its shares to the general public on the stock exchanges. It not only fosters the development of a strong business framework but also offers directors the advantage of limited liability. To register a Company under the Companies Act, 2013, it needs to be registered with ROC (Registrar of Companies) as per the guidelines & norms laid down by the Ministry of Corporate Affairs (MCA).
BizFinTax offers a cost-effective and quality service to facilitate the Private Limited Company Registration process, managing legal formalities and ensuring adherence to MCA regulations. Upon successful registration, you receive a Certificate of Incorporation, along with PAN, TAN, and other necessary documents, enabling you to smoothly initiate business operations after setting up a current bank account.
Advantages of Private Limited Company Registration in India
- Separate Legal Existence: The Company enjoys a separate legal existence from the owners and can enter into its own assets, contracts & sue third parties in its own name.
- Ease in Raising Funds: Being a highly compliant structure, banks prefer to issue loans easily to Companies.
- Limited Liability: Owners can limit their liabilities to their capital contribution commitment. Their personal assets are safeguarded from any big loss or debt in the business, unlike Proprietorship Firms & Partnership.
- Easy Transferability: Shares can be easily transferred to other persons.
- ESOP (Employee Stock Option Plans): Private Companies can issue Employee Stock Option Plans to their employees.
Checklist for Private Limited Company Registration in India
- A minimum of 2 Directors are required.
- A minimum of 2 Shareholders and a maximum of 200 Shareholders are required.
- DSC (Digital Signature Certificate) for all designated Directors.
- DIN (Director Identification Number) for all Directors.
- At least 1 Director must be an Indian Resident.
- Company name should be unique.
- Authorized and Paid-up Capital.
- MoA (Memorandum of Association) & AoA (Articles of Association).
- Proof of registered office.
- Brief Object of the business.
Documents Required for Private Limited Company Registration in India
- PAN Card of all Directors.
- Aadhar Card of all Directors.
- Latest Bank Statement (Not older than 2 months).
- Passport size-photos of all Directors.
- Email and Mobile Number of all Directors.
- Proof of Registered Office Address.
- Latest utility bills (electricity, gas, telephone, etc.).
Foreign Nationals or NRIs as Shareholders/Directors
- Obtain a Director Identification Number (DIN) & DSC: Foreign nationals must apply for a DIN before being appointed.
- Provide Supporting Documents: Documents must be certified by a notary in the applicant's home country or the Indian Embassy.
- Provide Proof of Identity: A valid passport is required.
- Provide Proof of Address: Includes a copy of a driving license, bank statement, or electricity/telephone bill.
- Provide a Passport-sized Photograph: Required for verification.
- Email and Mobile number of foreign nationals.
Comparison of Business Structures
| Feature | Private Limited Company (PLC) | One Person Company (OPC) | Limited Liability Partnership (LLP) |
|---|---|---|---|
| Ownership | Minimum 2 and maximum 200 shareholders | Only 1 shareholder (individual or a nominee) | Minimum 2 partners, no upper limit |
| Liability | Limited liability for shareholders | Limited liability for the sole shareholder | Limited liability for partners |
| Legal Status | Separate legal entity | Separate legal entity | Separate legal entity |
| Minimum Capital | 1 Lakh | 1 Lakh | No minimum capital requirement |
| Statutory Audit | Mandatory | Mandatory | Required if turnover exceeds Rs. 40 lakhs |
| Ownership Transfer | Allowed with restrictions | Not possible (only nominee transfer allowed) | Allowed via admission of new partners |
| Regulatory Authority | MCA | MCA | MCA & LLP Act, 2008 |
| Annual Filing | Yes | Yes | Yes |
| Ownership by Foreigners | Allowed, subject to FDI regulations | Allowed, subject to FDI regulations | Allowed, subject to FDI regulations |
