WHAT IS PRIVATE COMPANY REGISTRATION?

A Private Limited Company is the most popular as well as the most preferred choice of business entity in India. As it requires a minimum of 2 members, it is most appropriate for small and medium-sized businesses and start-ups. It is a privately held business entity with a limited liability and allows for a 100% foreign direct investment with government approval. It takes only around two weeks to set up a Private Limited Company. It also allows a significant degree of distinction between the business entity and the management.

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 COMPANY REGISTRATION PROCESS IN INDIA

In order to start your business with such an entity, you need to go through the process of Private Limited company incorporation. Once you are successful with the process, you will get to enjoy the perks of a private limited company that include the following:

STEP 1: SELECT A COMPANY NAME

The first step is to finalize a brand name and company legal name in consultation with a professional and check the availability of the name on the Ministry of Corporate Affairs (MCA) website.

STEP 2: DIGITAL SIGNATURE CERTIFICATE (DSC)

All proposed directors of the Private Limited Company must have a digital signature that will be used to file the online Company Registration application. Moreover, one can use the same DSC for a signing of ROC compliance e-forms, and E-Income Tax returns in the future.

STEP 3: DIRECTOR IDENTIFICATION NUMBER (DIN)

DIN is a unique Director Identification Number which is allotted to every person who intends to become a director in a company. Application for the allotment of DIN is made in the SPICe form at the time of incorporation.

STEP 4: NAME APPROVAL

For the name approval step, an application is filed in the prescribed Form RUN (Reserve Unique Name) with the Ministry of Corporate Affairs.

STEP 5: SUBMISSION OF FINAL INCORPORATION FORM (SPICE) ALONG WITH MOA & AOA

After name approval, one needs KYC, and other prescribed documents of Directors & Shareholders. After submission of SPICe form to MCA one will get Certificate of registration along with PAN & TAN.

As per the recent amendment, a new form has been introduced named as AGILE (INC-35). This form is accompanied with the SPICe form.

Submission of this form will provide registration of EPFO (Employees Provident Fund Organization), ESIC (Employee State Insurance Corporation) and GST for the company.

STEP 6: BANK ACCOUNT

Open your bank Account and Launch your business.

BENEFITS

1: SEPARATE LEGAL ENTITY

A company is a separate person having its own rights & obligations. The identity of a Private Limited Company is distinct from that of its members.

2: EASE OF FORMATION

A Private Limited Company can be incorporated with minimum 2 directors by filing SPICe E Form INC-32 along with link form SPICe MOA (INC-33) and SPICe AOA (INC-34) AGILE(INC-35). Once the documents are verified, Certificate of Incorporation (COI) is issued to the company by MCA within 2 to 3 days under Fast Track Registration.

3: NO MINIMUM SHARE CAPITAL

For a private company, the earlier minimum number of share capital was Rs. 1,00,000, but now there is no such minimum obligation therefore, there is no pressure of fund requirements.

4: EASY TO RAISE FUNDS

A Private Limited Company has the flexibility to easily raise loans and investments from Angel Investors, Venture Capitalists NRIs and foreigners.

5: TAX BENEFITS

A registered private limited company enjoys many tax benefits as well.

6: EASY TO SELL

Private Ltd. is easy to sell, very less documentation and cost is involved in selling a Private Ltd. company.

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