This article is a step-by-step guide on How to register a Private Limited Company in India?
Table of Contents
Introduction
If you’re considering starting a business in India, one of the most popular and preferred options is to register a private limited company. A private limited company offers several advantages, such as limited liability, separate legal entity status, and easy access to funding. This article will guide you through the process of registering a private limited company in India.
Understanding Private Limited Companies
A private limited company is a business entity that is privately held by shareholders and limits the liability of its owners. It is governed by the Companies Act, 2013, and the Ministry of Corporate Affairs (MCA) in India. The company’s shares are held by a few individuals, and the transfer of shares is restricted. The liability of the shareholders is limited to their shareholding, protecting their personal assets in case of any financial liabilities.
Benefits of Registering a Private Limited Company
Registering a private limited company in India provides numerous benefits. Some of the key advantages include:
- Limited liability protection for shareholders.
- Separate legal entity status, distinct from its owners.
- Easy access to funding and better credibility with investors.
- Perpetual succession, ensuring continuity of the business.
- Tax advantages and exemptions available to companies.
- Greater scope for expansion and scalability.
- Enhanced trust and confidence among customers and suppliers.
Steps to Register a Private Limited Company in India
Step 1: Determine the Name and Structure of the Company
Choose a unique and suitable name for your private limited company. Ensure that the name complies with the rules and regulations provided by the MCA. The company name needs to conclude with “Private Limited” or “Pvt. Ltd.” as specified by the Ministry of Corporate Affairs (MCA). Decide on the company’s structure, such as the number of directors and shareholders.
Step 2: Obtain Digital Signature Certificates (DSC)
To register your private limited company in India, it is necessary to acquire a Digital Signature Certificate (DSC) for the intended directors of the company. A DSC serves as a digital counterpart to a physical signature, enabling the electronic signing of documents. It is a mandatory requirement to submit the company registration documents digitally to the Ministry of Corporate Affairs (MCA).
Step 3: Apply for Director Identification Number (DIN)
The next step involves obtaining a Director Identification Number (DIN) for each of the prospective directors of your company. DIN is a unique identification number assigned by the Ministry of Corporate Affairs (MCA) to individuals aspiring to serve as company directors. It is mandatory to include the DIN in various company-related documents and filings as per regulatory requirements. Apply for DIN through the MCA portal by submitting the required documents.
Step 4: File the Required Documents with the Registrar of Companies (ROC)
Once you have successfully obtained the Digital Signature Certificate (DSC) and Director Identification Number (DIN), the subsequent step to register a private limited company in India involves filing the necessary company registration documents. These documents comprise the Memorandum of Association (MOA), Articles of Association (AOA), Form SPICe (INC-32), and Declaration by Directors and Subscribers.
The Memorandum of Association (MOA) is a legally binding document that encompasses vital details such as the company’s name, registered office address, object clause, and capital structure. It precisely defines the scope of activities in which the company intends to operate.
The Articles of Association (AOA) is a document that outlines the internal rules, regulations, and by-laws of the company. It delineates the rights, powers, and duties of the directors and shareholders within the company.
Form SPICe (INC-32) is a standardized form used for electronic company incorporation. It necessitates the provision of pertinent information, including the details of the proposed directors, shareholders, registered office address, and other relevant particulars.
The Declaration by Directors and Subscribers is a declaration that must be signed by the proposed directors and subscribers of the company. It asserts that they are not disqualified from holding the positions of directors or shareholders in a company.
File these documents with the Registrar of Companies (ROC) along with the required forms and fees through SPICe+ portal. Upon successful submission of the documents and completion of the verification process, the ROC will issue the Certificate of Incorporation. This certificate signifies the formal registration of the company.
Step 5: Obtain Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN)
After receiving the Certificate of Incorporation (COI), the subsequent step involves applying for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for your private limited company. PAN is a unique identification number issued by the Income Tax Department. It is essential for various tax-related purposes, including filing income tax returns and conducting financial transactions. On the other hand, TAN is a distinct number assigned to entities responsible for deducting or collecting taxes at the source. It facilitates the tracking and reporting of tax payments to the government.
Register your private limited company with confidence by choosing S J Kotak & Co. Chartered Accountants, a trusted and leading CA firm in Rajkot. We will provide comprehensive guidance throughout the registration process, ensuring adherence to all legal requirements. Get in touch with us today to take the crucial first step towards establishing your dream company in India, knowing that you are in capable hands.