About PVT Registration

What is a private limited company?

One of the most popular business forms in India is the private limited company, which is a privately held organisation with limited liability. Its many benefits, which include limited liability protection, simplicity in establishment and upkeep, and position as a separate legal organisation, are principally responsible for its appeal. A private limited company needs a minimum of two members and two directors in order to operate, and it benefits from legal independence from its owners. The following are the essential qualities of an Indian private limited company:

• Protection from Limited Liability: A private limited company's shareholders are only accountable to the amount of their ownership. Even in the event that the company experiences financial difficulties, their assets are protected.
• Independent Legal Entity: A private firm is a separate legal entity. Under its own name, it is able to enter into contracts, own property, and bring or defend legal action.
• Minimum Number of Shareholders: A private business can have up to 200 shareholders, but no more than two.
• Minimum Number of Directors: Two directors are required for a private limited business. These directors have to be Indian citizens at least one of them.
• Minimum Share Capital: The business must keep a minimum of one lakh rupees in paid-up capital, or a larger amount as mandated.
• Corporation Name: The last part of the name of a private limited corporation must be "Private Limited."
• Limitations on Share Transfer: Within a private limited corporation, there exist restrictions on the transfer of shares. Only the Board of Directors' approval or as stipulated in the company's Articles of Association may be used to transfer shares.
• Public Invitation Prohibition: It is against the law for private limited enterprises to extend an invitation to the general public to subscribe for shares or debentures.
• Compliance Requirements: Private limited corporations must comply with a number of legal and regulatory requirements. These include filing yearly returns with the ROC, holding annual general meetings, and keeping accurate financial records.

Types of Pvt Limited Companies

• Company Limited by Shares: The Memorandum of Association specifies a nominal share level, above which shareholders' liability is restricted.
• 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.

Requirements for Registering a Company

• Directors and Members

  According to the Companies Act of 2013, a private limited company must be registered in India with at least two directors and 200 members.
  A Director Identification Number (DIN), given by the Ministry of Corporate Affairs (MCA), is required for directors.
  With a minimum of 182 days spent in India during the preceding calendar year, a director must be a resident of India.

• Company Name

  Two things need to be taken into account while choosing a name for an Indian private limited company registration.
  The primary business activity should be reflected in the name.

• Address of the Registered Office

  Following the company registration procedure, the business needs to give the company registrar the permanent address of its registered office. This office is where business is conducted and where all pertinent corporate paperwork is kept up to date.

Advantages of Pvt.Ltd Company

In India, a Private Limited Company Incorporation is a widely used business structure. Let me describe the various benefits and drawbacks of this.

• Limited Liability: This protects personal assets from the debts and liabilities of the firm by limiting shareholders' liability to the amount of their capital contribution.
• Differentiated Legal Identity: A Private Limited Company is a separate legal entity from its owners. It is able to enter into contracts, hold property, and bring or defend legal proceedings on its own behalf.
• Constant Existence: The business continues to operate even in the event that directors or shareholders change. Its continued existence is not dependent on how long its partners live.
• Funding Ease: It is simpler to raise money by issuing shares to angel, venture, or capitalists. This arrangement draws in outside capital.
• Tax Benefits: Private Limited Companies are tax-efficient businesses since they may be eligible for a number of tax breaks and exemptions.
• Credibility and Trust: Customers, suppliers, and partners tend to be more confident and trusting of a company that has "Pvt. Ltd." in its name.

Disadvantages of Pvt.Ltd Company

Certainly, Limited Liability Partnerships (LLPs) present numerous advantages despite a few inherent disadvantages:

• Compliance Burden: Deal with legal requirements like as filings, audits, and financial reporting.
• Complex Setup: Compared to more surface-level systems, the process and management costs are higher.
• Share Limitations: 200 shareholders maximum in India; restricted share transfers.
• Public Disclosure: The public's access to financial information affects privacy.
• Exit Complexity: Compared to other structures, selling or departing is more difficult.
• Slower Decisions: Involving directors and shareholders may cause decisions to move more slowly.

To initiate the LLP company registration process, partners are required to furnish the following documents:

Pvt.Ltd Company Registration Process

Step 1: Acquire a Digital Signature Certificate

A Digital Signature Certificate (DSC) from the Controller of Certification Agencies (CCA) is required for each director and shareholder. This entails supplying necessary information including a phone number, email address, PAN, Aadhaar card, and passport-sized pictures. Additionally, if necessary, documents notarised and apostilled by foreign nationals must be provided.

Step 2: Director Identification Number (DIN)

If you want to serve as a director for the organisation, you must get a Director Identification Number (DIN). Directors must supply DIN, which must be included on the registration form.

Step 3: Name Reservation for the Company (SPICe+ Part A)

To obtain a distinctive business name, start by filling out the SPICe+ Part A form. This comprises identifying the main industrial activity division, choosing the company type, class, category, and subcategory, and providing a thorough business description. Two names must be suggested for approval.

Step 4: Submission of Company Details (SPICe+ Part

Give full facts about the capital, the address of the registered office, the subscribers and directors' information, the stamp duty, the PAN and TAN application, and any required attachments.

Step 5: Preparation and Submission of Incorporation Forms (SPICe+ MOA and AOA)

Write the important firm information in the Memorandum of Association (MOA) and Articles of Association (AOA). Get professional and subscriber digital signatures before sending these documents to the MCA for approval.
In addition, register for a bank account, GST, EPFO, ESIC, and a store and establishment licence (which may vary by state) by submitting the AGILE-PRO-S form.