Complete Guide to Private Limited Company Registration in India

Overview of Pvt Limited Company Registration

Starting a business in India, The private limited company Registration is a good choice. This type of company follows the Companies Act of 2013.

The Ministry of Corporate Affairs (MCA) is responsible for its supervision.It is popular because it has many benefits. One key advantage is limited liability. This means your personal assets are safe if your business has debts or fails.

Getting your private limited company registration in India done the right way is crucial. You must ensure that you meet all legal requirements and prepare all documents.

This is where experts, like the team at PSR Compliance, can help. We make registering a private limited company simple, affordable, and easy. We manage everything from initiation to completion.

What is a Private Limited Company?

A private limited company is a business structure owned by a small group of people. It requires a minimum of 2 members to start, with a maximum of 200 members. One of the best features of this type of company is that directors and members are only liable for unpaid shares. This means your personal assets won’t be at risk if the company faces financial trouble.

Requirements of Private Limited Company

To set up a private limited company registration in India, you'll need to meet some basic requirements. Here are the key points:

• Directors and Shareholders: At least 2 directors and 2 shareholders are needed. There can be a maximum of 15 directors, and a company can have up to 200 shareholders.
• Director Identification Number (DIN): Each director must have a DIN before you start the process.
• Indian Resident Director: One of the directors must be an Indian resident. This means they have lived in India for at least 182 days in the past year.
• Unique Company Name: The name of your company should be unique and not similar to any existing registered companies.
• Business Address: You must provide a permanent address for the company. This is where business activities will happen.

Types of Private Limited Companies

Three main types of private limited companies exist, classified by their share capital:

1. Limited by Shares: In this type, the liability of shareholders is limited to the amount unpaid on their shares.
2. Guarantee Limited: The liabilities of members are confined to a predetermined guarantee sum. This sum is only payable if the company is winding up.
3. Unlimited Liability: Here, shareholders are personally liable for the company's debts, even to the extent of their personal property.
   

Benefits of a Private Limited Company

Starting a private limited company offers many advantages, making it a great choice for small businesses looking to grow. Here are some of the key benefits:

1. Limited Liability

One of the main advantages is limited liability. As a shareholder in a private limited company, you only need to cover the amount unpaid on your shares. This means your personal assets are safe even if the company faces financial issues.

2. Raising Capital

A private limited company can raise funds by issuing shares to investors. This makes it easier to gather capital and grow the business, especially if you plan to expand quickly.

3. Separate Legal Entity

A private limited company is considered a separate legal entity from its shareholders. This implies that the corporation can possess properties, engage in agreements, and be accountable for its own financial obligations. The personal properties of the shareholders remain untouched by the financial condition of the company.

4. Perpetual Succession

A private limited company continues to operate even if a shareholder or director departs or passes away. It will persist until someone legally terminates it.

Documents Required for Online Private Limited Company Registration

To register your private limited company online, you’ll need to submit several important documents. These are necessary for verification and ensuring everything is in order for the private limited company registration. Here's what you'll need:

• Director Identification Number (DIN) and Aadhar card for each director.
• PAN card and Aadhar card belonging to the directors.
• Proof of address for each director (such as a recent bank statement, utility bill, etc.).
• A recent passport-sized photograph of all directors.
• Business address proof, such as a tax bill, utility bill, or rent agreement.
• If you're renting the business property, you will also need a No Objection Certificate (NOC) from the property owner.

Procedure for Private Limited Company Registration

Here’s a simple breakdown of how the private limited company registration in India process works:

Step 1: Get a Digital Signature Certificate (DSC)

Each director must have a DSC for online submissions. This digital signature is essential for signing official documents online.

Step 2: Obtain a Director Identification Number (DIN)

Before you can become a company director, you need to apply for a Director Identification Number (DIN).

Step 3: Reserve the Company’s Name

You need to choose a unique name for your company. The Registrar of Companies (ROC) must approve this name before you proceed with the rest of the registration.

Step 4: Submit the Application for registration

You will send your application to the ROC. Include the Memorandum of Association (MOA) and Articles of Association (AOA) with it. This includes information about the company’s capital, office address, directors, and other key details.

Step 5: Submit MOA and AOA

The MOA and AOA are crucial documents that outline the company’s objectives, rules, and regulations. Once they approve these, the company officially incorporates.

Step 6: Receive the Certificate of Incorporation

Once everything is verified, you’ll receive the Certificate of Incorporation. This document marks the official formation of your private limited company.

Pvt Ltd Company Registration Fees in India

The cost of private limited company registration in India can vary. It usually includes government filing fees, professional service charges, and additional costs for documentation and name reservations. Fees depend on the state where you register the company and the type of service you choose.

Here’s a breakdown of the main government fees you’ll encounter during online private limited company registration:

• Name Approval Fees

1. Cost: ₹1,000 
2. What it is: This is the fee to reserve your company’s name with the Registrar of Companies (ROC).

• Stamp Duty

1. Cost: ₹1,000 - ₹5,000 (depends on state except Madhya Pradesh and Punjab)
2. What it is: Stamp duty is required on the Memorandum of Association (MOA) and Articles of Association (AOA). The amount depends on your company’s authorised capital and your state.

• PAN and TAN Fees

1. Cost: ₹143 
2. What it is: A PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) are required for your company to handle taxes.

• Digital Signature Certificate (DSC) Fees

1. Cost: ₹2,000 per director
2. What it is: A Digital Signature Certificate (DSC) is required for directors to sign documents online.

• Director Identification Number (DIN) Fees

1. Cost: ₹500 per director
2. What it is: Every director needs a Director Identification Number (DIN) for company registration.

Frequently Asked Questions (FAQ)

Q1. How do you register a Pvt Ltd company?

To register a private limited company in India, you must first acquire a Digital Signature Certificate (DSC) and Director Identification Number (DIN). Next, write the Memorandum of Association (MOA) and the Articles of Association (AOA). After that, submit the application to the Registrar of Companies (ROC).

Q2. What is the private limited company registration cost?

The fees for registering a private limited company in India depend on several factors. These include the type of company, its location, and the professional services used. To get an accurate cost, contact PSR Compliance.

Q3. What is the minimum paid-up capital required for Pvt Ltd Company registration?

The Companies Amendment Act of 2015 removed the need for a minimum paid-up capital. This change allows people to register a private limited company in India more easily.

Q4. Do I need to file MOA and AOA during registration?

Yes, you must file both the MOA and AOA during the private limited company registration process.

Q5. Can NRIs register a private limited company in India?

Yes, NRIs can register a private limited company in India. They can also hold shares in the company according to the Foreign Direct Investment (FDI) rules.

Q6. Is GST mandatory for private company registration?

If your company makes more than ₹40 lakhs a year from goods or ₹20 lakhs from services, you must register for GST.

Q. How do you choose a name for Pvt. Ltd. company registration?

Your company name should be unique and related to what you do. It must also include the suffix Pvt. Ltd. or Private Limited.

Q8. What is the private limited company registration fee?

Pvt Ltd company registration fees in India differ by state and jurisdiction. Contact us to learn the specific charges in your location for private limited company registration.