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Private Limited Company Registration in India
When establishing a business in India, many opt for a private limited company due to its attractive blend of limited liability protection for shareholders and distinct ownership regulations. In contrast, LLPs grant partners direct management control. Private limited company registration through Bmcsindia streamlines the process, providing a cost-effective solution.
Our expert team manages all legal formalities, ensuring full compliance with Ministry of Corporate Affairs (MCA) regulations. With us, you can confidently set up your business in India, enjoying the benefits of limited liability and clear distinctions between directors and shareholders.
What is a private limited company?
In India, a private limited company stands as a privately owned enterprise, prized for its coveted status among business structures. Its widespread preference is attributed to a host of advantages, such as limited liability protection, simplified establishment and upkeep, and its independent legal identity.
This business form distinctly separates itself from its owners, mandating a minimum of two members and two directors for its operation. The key features of a private limited company in India encompass these characteristics.
- Limited Liability Protection: Shareholders of a private limited company are liable only to the extent of their shareholding. Their assets remain safeguarded, even in cases of financial setbacks incurred by the company.
- Separate Legal Entity: A private company possesses its own distinct legal identity. It can own property, engage in contracts, and initiate or defend legal actions under its unique name.
- Minimum Number of Shareholders: A private company must have a minimum of two shareholders and cannot exceed 200 shareholders.
- Minimum Number of Directors: A private limited company necessitates a minimum of two directors. At least one of these directors must be an Indian citizen.
- Minimum Share Capital: The company must maintain a minimum paid-up capital of Rs. 1 lakh or a higher amount as specified.
- Name of the Firm: The private limited company's name must conclude with the words "Private Limited."
- Restrictions on Share Transfer: The right to transfer shares within a private limited company is restricted. Shares can only be transferred with the approval of the Board of Directors or following the company's Articles of Association.
- Prohibition on Public Invitation: Private limited companies are prohibited from inviting the public to subscribe to their shares or debentures.
- Compliance Requirements: Private limited companies are obligated to adhere to various legal and regulatory obligations, including maintaining proper financial records, conducting annual general meetings, and filing annual returns with the ROC.
In a nutshell, the favorable attributes of a private limited company in India make it a top choice for entrepreneurs, thanks to its advantageous characteristics and a relatively uncomplicated framework.
Types of Private Limited Companies:
- Company Limited by Shares: Shareholders' liability is limited to the nominal share amount mentioned in the Memorandum of Association.
- Company Limited by Guarantee: Member liability is limited to the amount of guarantee specified in the Memorandum of Association. This guarantee is invoked only during winding up.
- Unlimited Companies: Members of unlimited companies have unlimited personal liability for the company's debts and liabilities. However, they are still considered a separate legal entity, and individual members cannot be sued.
Advantages of a Private Limited Company
A Private Limited Company is one of India’s most popular business structures. It offers several advantages and some disadvantages, let us explain.
- Limited Liability: Shareholders' responsibility is restricted to the extent of their capital contribution, safeguarding personal assets from the company's financial obligations and liabilities.
- Distinct Legal Identity: A Private Limited Company possesses an independent legal identity distinct from its proprietors. It has the capacity to own assets, engage in contractual agreements, and initiate or defend legal actions under its own name.
- Continuous Existence: The company's existence persists irrespective of shifts in shareholders or directors. Its existence is not contingent upon the lifespan of its associates.
- Ease of Funding: Raising capital by issuing shares to investors, venture capitalists, or angel investors is easier. This structure attracts external investment.
- Tax Benefits: Private Limited Companies may qualify for various tax benefits and exemptions, making them tax-efficient entities.
- Credibility and Trust: Having "Pvt. Ltd." in your company name often instills more confidence and trust in customers, suppliers, and partners.
Disadvantages of a Private Limited Company
- Compliance Burden: Face regulatory demands, including financial reporting, filings, and audits.
- Complex Setup: Process and cost for managing are higher than more superficial structures.
- Share Limits: Restricted share transfers; max 200 shareholders in India.
- Public Disclosure: Financial info is publicly viewable, impacting privacy.
- Exit Complexity: Selling or leaving is more complicated than with other structures.
- Slower Decisions: The involvement of shareholders and directors may slow choices.
Requirements for Registering a Company in India:
Directors and Members:
Private Limited Company Registration in India, under the Companies Act of 2013, mandates a minimum of two directors and 200 members.
Directors must possess a Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA).
Additionally, one director must be an Indian resident, residing in India for at least 182 days in the preceding calendar year.
Company Name:
When choosing a name for a private limited company, it's essential to ensure that the name mirrors the primary business activity.
Address of the Registered Office:
After the company registration process, the company must provide the permanent address of its registered office to the company registrar. Business operations occur in this office, and all relevant company documentation is maintained.
Documents Required for LLP Registration
To initiate the registration process for an LLP, partners are required to furnish the following documents:
- PAN Card/ID Proof of Partners: Address Proof of Partners: Partners can submit the following documents: Voter's ID, Passport, Driver's License, or Aadhar Card.
- Residence Proof of Partners: Partners need to provide recent documents such as a bank statement, telephone bill, mobile bill, electricity bill, or gas bill from the last 2-3 months.
- Passport-size Photograph: Partners should provide a passport-size photograph with a white background.
- For Foreign Nationals and NRIs: Foreign nationals and NRIs intending to partner in an Indian LLP should submit their passport. Additionally, proof of address, such as a driving license, bank statement, residence card, or any government-issued identity proof containing the address, is required.
- Proof of Registered Office Address: This includes the landlord's rent agreement and a no-objection certificate if the office space is rented. A recent utility bill (gas, electricity, or telephone) with the complete address and owner's name (dated two months or older) should also be submitted.
- Digital Signature Certificate (DSC): At least one designated partner must have a DSC for digitally signing documents.
Company Registration Process
Registering a company in India involves a straightforward four-step process:
Step 1: Acquire a Digital Signature Certificate (DSC)
Each director and shareholder must obtain a Digital Signature Certificate (DSC) issued by the Controller of Certification Agencies (CCA). The process includes submitting essential information, such as passport-sized photos, PAN, Aadhaar Card, phone number, and email address. Foreign nationals, if applicable, should also provide notarized and apostilled documents. This ensures compliance with the necessary regulatory requirements for digital signatures.
Step 2: Director Identification Number (DIN)
Becoming a director in a company is an exciting and important step in your business journey. To facilitate this process, you'll need to obtain a Director Identification Number (DIN), which is a crucial requirement for directors and must be provided in the company's registration form.
Step 3: Name Reservation for the Company (SPICe+ Part A)
Commencing the journey to establish your own company is an exciting venture. The first step on this path involves completing the SPICe+ Part A form to secure a unique and distinctive company name. This process entails several key decisions and steps, which, when approached with care and creativity, can set the tone for your business's identity.
Step 4: Submission of Company Details (SPICe+ Part B)
Offer detailed information regarding capital, the registered office address, subscriber and directors' particulars, stamp duty, PAN and TAN application, and the requisite attachments. Guarantee compliance with the Companies Act 2013 and obtain digital signatures from supporting professionals.
Step 5: Preparation and Submission of Incorporation Forms (SPICe+ MOA and AOA)
Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) containing essential company details. Acquire digital signatures from subscribers and professionals before submitting these documents to the MCA for approval. Furthermore, complete the filing of the AGILE-PRO-S form to register for GST, EPFO, ESIC, a bank account, and a shop and establishment license, which may vary based on the state's requirements.
Certificate of Incorporation
Following successful document verification, the MCA will issue the Certificate of Incorporation (COI) with the Company Identification Number (CIN), as well as PAN and TAN for the newly incorporated company.
Document Checklist:
For Indian Nationals: Self-attested PAN card copy, passport-sized photo, Aadhaar Card, proof of identity, and address proof. For Foreign Nationals: Notarized documents, passport-sized photo, passport, and address proof. Registered Office Documents: Proof of business address, copy of the rent agreement (if applicable), and owner's no objection certificate.
Post-Registration Compliance
Following incorporation, adhering to post-registration company compliances is essential to streamline company operations and define the roles and responsibilities of directors and shareholders.
Register Your Company through Bmcsindia
Bmcsindia specializes in providing professional Company Registration services in India, offering extensive guidance and support throughout the registration process. Our team of experienced professionals provides expert consultation tailored to your unique requirements and business objectives.
Selecting an appropriate name for your company is a crucial step, and our Bmcsindia experts are here to assist you in choosing a distinctive and compliant name that aligns with ROC (Registrar of Companies) guidelines. We'll perform a thorough name availability search and handle the reservation of your chosen name, ensuring that it perfectly reflects your business identity.
We understand that compiling the necessary documentation for company registration can be a daunting task. Our experts are well-equipped to efficiently manage this process. We will provide guidance to help you assemble all the required documents with precision and full compliance.
In the case of registering a private limited company, directors must acquire a Digital Signature Certificate and Director Identification Number (DIN). Bmcsindia will guide you through this process, ensuring that you possess the necessary certifications for a seamless registration experience.
By selecting Bmcsindia for your Company Registration requirements, you can have confidence that your private limited company registration will be handled with the utmost professionalism and effectiveness. Our goal is to simplify the process, enabling you to concentrate on your core business objectives while we take care of the legal requirements.
Embark on your entrepreneurial journey with the assurance of a seamless and compliant company registration process by choosing Bmcsindia as your trusted partner. We are committed to helping you navigate the complexities of business registration in India.
Your success is our utmost priority!
Proprietorship vs Limited Liability Partnership (LLP) vs Company
| Features | Proprietorship | Partnership | LLP | Company |
|---|---|---|---|---|
| Definition | Unregistered type of business entity managed by one single person | A formal agreement between two or more parties to manage and operate a business | A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company. | Registered type of entity with limited liability to the owners and shareholders |
| Ownership | Sole Ownership | Min 2 Partners Max 50 Partners | Designated Partners | Min 2 Shareholders Max 15 Directors Max 200 Shareholders 1 Director 1 Nominee Director |
| Registration Time | 7-9 working days | |||
| Promoter Liability | Unlimited Liability | Limited Liability | ||
| Documentation | Partnership Deed | LLP Deed Incorporation Certificate | ||
| Governance | – | Under Partnership Act | LLP Act, 2008 | Under Companies Act,2013 |
| Transferability | Non Transferable | Transferable if registered under ROF | Transferable | |
| Compliance Requirements | Income tax filing if turnover is more than Rs.2.5 lakhs | ITR 5 | ||
Frequently Asked Questions
BMCS India offers comprehensive business consultancy services, including strategy development, market research and analysis, financial advisory, operational optimization, and organizational transformation. We provide customized solutions to help businesses address challenges and achieve their growth objectives.
BMCS is the top most business management consultant all around the world. Our team of experienced consultants leverages industry knowledge, market insights, and proven methodologies to provide tailored solutions that align with your business goals. Whether you need assistance with market entry, strategic planning, process optimization, or talent management, we collaborate closely with you to understand your unique needs
BMCS India has expertise across various industries, including but not limited to technology, healthcare, manufacturing, retail, finance, and hospitality. Our consultants have worked with diverse clients, enabling us to understand industry-specific challenges and devise strategies that meet your sector's requirements.
To engage our services, you can reach out to us through our contact form, email, or phone. Our team will schedule an initial consultation to discuss your business objectives, challenges, and requirements. Following this consultation, we will provide a tailored proposal outlining the scope of work, deliverables, timeline, and pricing for your approval.
Absolutely! We work with businesses of all sizes, ranging from startups and small enterprises to multinational corporations. Our services are flexible and customizable to meet your specific needs, ensuring that you receive the level of support required to achieve your business objectives, irrespective of your company's size.
At BMCS India, we understand the importance of client confidentiality. We adhere to strict data protection protocols and maintain the highest level of confidentiality. Our consultants sign non-disclosure agreements, and we have robust internal systems in place to safeguard client information. Rest assured, your sensitive data is handled with the utmost care and confidentiality.
Yes, we can help your business expand internationally. Our team has experience and expertise in supporting companies with market entry strategies, feasibility studies, partner identification, and localization strategies in various global markets. We leverage our network of international partners to provide you with valuable insights and guidance throughout the expansion process.
To get started with BMCS India, simply reach out to us through our contact information on our website. We will be glad to schedule an initial consultation to understand your business requirements and discuss how our services can benefit you. From there, we will work together to develop a tailored plan to drive your business success.