A Private Limited Company is a business which is held by a small group of people. The liabilities of the shareholders of the Private Limited Partnership shall be limited to the corresponding amount of shares owned by them. Shareholders of a private limited company cannot transfer their share to others. Private firms can issue shares and have shareholders, however, their shares are not traded on government markets and therefore are not issued by an IPO. A private limited company has a minimum of 2 members and a maximum of 200 members. Previously, the Companies Act 2013 required that almost all private limited companies shall retain the lowest possible pay-up capital of Rs 1 lakh.
A private limited company is a legal seprate entity. It is governed under the Indian companies act 2013. It is required minimum paid-up capital of 1 lakh rupees. The minimum number of members is 2 and the maximum of 200. Transfer of share is restricted. Shareholders of a private limited company cannot transfer their share to others.
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Documents required to register for Private Limited Company–
• Identity Proof proof: PAN card and passport of Indian and foreign directors.
• Address proofs: Ration card or Aadhar card or driver’s license or voter ID
• Residence proofs: Bank statement or electricity bill of the residence
• Notarized rental agreement
• No Objection Certificate from the property owner
• A copy of property deed or sale deed (for an owned property)
Steps to register a Private Limited Company
Step 1: Obtain a Digital Signature Certificate (DSC)
1) The first step to register a private limited company is to acquire the DSC ( Digital Signature Certificate )
2) Any e-form is filed with the Ministry after affixing the Digital Signature Certificate of the Authorised Signatory for Company Incorporation.
3) It is also required for the application of DIN( director identification number) of the directors.
4) Digital Signature Certificate is mandatory for all subscribers and witnesses in the memorandum and articles of association.
5) One must obtain the Digital Signature Certificate from government recognized certifying agencies.
6) Digital signature can be obtained in 1-2 business days.
Step 2: Obtain (DIN) Director Identification Number for Directors
1) It is an identification number for a director.
2) It has to be obtained by anyone who wants to be a director in a company.
3) One Director Identification Number is enough to be a director in any number of companies.
4) Director Identification Number allotment is carried out by the Ministry to the Individual for acting as Director in a company.
5) Forms for DIN application and modification thereof:
i. SPICe Form: Application for allotment of DINs to the proposed first Directors in respect of new companies shall be made in SPICe form only.
ii. DIR-3 Form: Any person intending to become a director in an existing company shall have to make an application in eForm DIR-3 for allotment of DIN.
iii. DIR-6 Form: Any changes in the particulars of the directors shall be filed in form DIR-6.
Step 3: Name approval Application
1) The next step in company registration involves making an application for reservation of name for the proposed company.
2) As of 26 January 2017, the Ministry of Corporate Affairs (MCA) has streamlined the Business Name Approval Process by launching a new, easy web-based software for Company Registration called RUN (Reserve Unique Name).
3) Under the RUN process, the applicant can submit 2 proposed names for approval in the order of preference. In case the applied names are not available for registration, the ministry will give 1 chance to resubmit the application with another set of 2 names for approval.
4) Alternatively, the applicant can apply for Company Name through the integrated SPICE Application for Company Registration.
5) In that case, one can submit only 1 name for seeking approval. However, there are 2 changes of re-submissions for the SPICE Application.
6) When the name requested has been accepted, it shall be preserved for the individual for a duration of 20 days during that it is appropriate to apply for the registration of the firm, the non-compliance of which shall bring to the removal of the name provided by the Ministry.
Step 4: Preparation of Documents for Incorporation of Company:
After approval of name or for Incorporation of Company applicant has to prepare the following below mentioned Documents;
1) INC-9 – Declaration by the first Subscriber(s) and Director(s)
2) DIR-2- First Directors’ statement, together with a replica of proof of identity and residential location.
3) NOC from the owner of the property
4) Office address proof (Conveyance/ Lease deed/ Rent Agreement etc. along with rent receipts)
5) Copy of the utility bills
6) If the subscriber/director doesn’t even have a DIN, it is obligatory to include: proof of identification and residential address of the subscriber(s)
Step 5: Application for Certificate of Incorporation
Once all the above-mentioned documents/ information are available and the name is reserved, the applicant has to fill the information in the e-form “Spice” INC-32 accompanied by SPICe_MOA and SPICe_AOA. Spice’ INC-32 is a streamlined pro forma for electronically integrating a firm. The application is submitted by paying the requisite Stamp Duty as applicable in the case of the concerned state on the portal.
