A Private Limited company is a business structure owned and managed by private stakeholders. Private limited company is incorporated under the companies at 2013 and governed by the ministry of corporate affairs (MCA). It is the ideal type of business entity for startup and growing businesses. Private limited company is an entity which is different from its shareholders and director to incorporate a private limited company a minimum of two shareholders and maximum up to two hundred shareholder are permitted. In private limited company the liability of each member/shareholder is limited only up to the number of shares held by them. Hence in case of liquidation of the company, personal and individual assets owned by shareholder are not at risk. Private limited company is a separate legal entity and continues in perpetual succession. Although registering a private limited company comes with higher compliance regulations and mandatory audit requirement still it is preferred by entrepreneurs as it helps them to raise their capital from different investors.
The following steps describe basic procedure for registering a private limited. There can be more steps depending on the applicants company profile and nature of business.
Step1:- Obtain Digital Signature Certificate(DSC):-The registrations form and all supporting documents, that need to be submitted online, require proposed director's DSC for verification purpose. Therefore obtaining DSC of the purposed director is an essential first step towards registration of Private limited company. DSC is issued by various government recognized certifying agencies. Documents required for obtaining DSC are:-
- Aadhar card/Voter ID/ Driving License.
- Copy of latest electricity bill/ water bill.
- PAN card/ Passport (in case of foreign nationals and NRTs).
- Passport size photograph ,specimen signature of the proposed director.
Step2:- Apply for Director Identification Number (DIN):- Every director of a private limited company is required to have a DIN. with filing SPICE+(INC-32) form DIN gets issued to the proposed director. DIN can be applied within SPICE+(INC-32) form for up to three directors. The documents required for obtaining DIN are identity proof of the proposed director/s such as:-
- Aadhar card/voter ID/ Driving license.
- Copy of latest electricity bill/water bill.
- PAN card/ Passport(in case of foreign nationals and NRIs).
Step3:- Application for Name Availability- By applying through SPICE+(INC-32) form applicant can select and reserve a proposed company's name for approval SPICE+(INC-32) form allows reservations for two preferred names of company and one resubmission attempts (RSUB). Before quoting company's name, it is always advisable to check from ministry of corporate affairs (MCA) portal for available names. Once submitted name is approved by the MCA it will be reserved for a period of twenty days and it can be used as proposed name of a private limited company in the registration form.
Step4:- Following supporting documents are required to be submitted along with the private limited company incorporation form.
- memorandum of association (MOA) -it is foundation on which the company id built. its defines ruler powers an objective of the company.
- The Article of association(AOA) - It is a set of rules and regulations relating to the management of the company.
- Documents required for Business Address proof - Latest electricity bill/ sale deed of the premises for self owned property. Similarly notarized rent agreement and no objection certificate(NOC) from owner of the premises for rented agreement and no objection certificate (NOC) from owner of the premises for rented property.
Step5:- Form Spice+(INC-32) for incorporation of private limited company enables application for several different services namely:
- Application for allotment of Directors Identification Number(DIN).
- Reservation of company's name.
- Incorporation of a proposed company.
- Application for allotment of PAN.
- Application for allotment of TAN.
- Application for opening a current account of the company.
- Application for allotment of goods and service tax registration number(GSTIN).
- Applicants is required to deposit a certain amount of registration fees with the application form. Private limited company registration fees in India slightly vary from state to state. Along with of the corporation form applicant is required to include all documents such as (MOA,AOA, identity proof of director /s Business address proof and DSC of the director. All details in the form are duly filled, along with the required documents and uploaded to the MCA portal for approval.
Step6:- Once the application form documents are verified by authorities the registrar of companies (ROC) issue a certificate of Incorporation(COI) with PAN number and TAN as allotted by Income Tax Department. Ministry of corporation Affairs(MCA) further approves the registration by allotting a corporate Identity Number(CIN) to the registered company which can be tracked online on MCA portal.