private limited company india

How to Register a Private Limited Company in India: A Step-by-Step Guide Introduction Starting a business in India is an exciting endeavor, and registering a Private Limited company is one of the most popular and trusted structures for entrepreneurs. It provides the benefits of limited liability, ease of raising funds, and separate legal entity status. If you're considering forming a Pvt Ltd company but are unsure of the steps, this guide will walk you through the entire process, including details about Pvt Ltd registration cost and other essential aspects. What is a Private Limited Company? A Private Limited Company is a business structure that divides ownership into shares, allowing each shareholder to own a portion of the company. The company limits its liability to the amount unpaid on the shares held by its members and operates independently of its shareholders. Benefits of Registering a Pvt Ltd Company Before we move into the step-by-step procedure for pvt ltd company registration, let’s take a look at the benefits that make it such a popular business structure: Limited Liability: The shareholders protect their personal assets, limiting their liability to their share capital in the company. Separate Legal Entity: The company functions as an individual legal entity, separate from its owners. This means it can own assets, enter contracts, and sue or be sued in its own name. Easy to Raise Capital: Investors prefer Pvt Ltd companies due to transparency, a clear organizational structure, and limited liability protection. Continuity: The company’s existence is not affected by changes in ownership. It can continue to exist irrespective of the status of shareholders or directors. Tax Benefits: There are various tax advantages available to Pvt Ltd companies in India. Pre-requisites for Pvt Ltd Company Registration Before starting the registration process, it’s important to ensure that certain requirements are met. Here's what you need: Number of Directors and Shareholders: A Pvt Ltd company must have a minimum of 2 directors and can have up to 15 directors. Additionally, it must have a minimum of 2 shareholders and can have a maximum of 200. Resident Director: At least one of the directors should be an Indian resident. Director Identification Number (DIN): Every director needs to have a DIN. Digital Signature Certificate (DSC): A DSC is required for filing documents online during the registration process. Step-by-Step Process to Register a Pvt Ltd Company in India 1. Obtain Digital Signature Certificate (DSC) Since the entire registration process is online, you must sign all documents digitally. Each director needs a Digital Signature Certificate (DSC), which is the first step in the Pvt Ltd registration process. You can obtain a DSC from certifying authorities like eMudhra, Sify, or N-Code. The cost of obtaining a DSC can vary depending on the certifying authority but typically ranges from INR 800 to INR 1,500 per person. 2. Apply for Director Identification Number (DIN) Once you have the DSC, the next step is to apply for the Director Identification Number (DIN) for all the proposed directors of the company. You can apply for a DIN through the Ministry of Corporate Affairs (MCA) portal using Form DIR-3. In case a director already has a DIN, this step can be skipped. 3. Name Approval The next step is to choose a unique name for your company. The name should not be identical or too similar to any existing company’s name in India. You can propose two names for the company by filing RUN (Reserve Unique Name) through the MCA portal. The Pvt Ltd registration cost for the RUN form is INR 1,000. If your proposed names are unavailable, you will need to resubmit the form with alternative names. 4. Preparation of Documents Once you approve the name, prepare several documents to file with the Registrar of Companies (ROC): Memorandum of Association (MOA): This document defines the objectives for which the company is being formed. Articles of Association (AOA): This document contains the rules and regulations governing the company’s internal management. Declaration of Directors: Each director must submit a declaration confirming their willingness to be part of the company. Proof of Registered Office Address: You must provide documentation of the company’s registered office address. This can include utility bills and a rental agreement (if applicable). 5. Filing SPICe+ Form Once the documents are ready, you need to file the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form online. This integrated form helps streamline the incorporation process and includes services like name reservation, DIN allotment, PAN/TAN application, and registration under EPFO and ESIC, among others. You will also need to upload the MOA, AOA, and other necessary documents while filing this form. 6. Company Incorporation Certificate After successfully submitting the SPICe+ form along with the required documents, the Registrar of Companies (ROC) will review your application. Once everything is verified and approved, the company will receive its Certificate of Incorporation (COI). The COI includes the Company Identification Number (CIN) and signifies the legal incorporation of your Pvt Ltd company. 7. Post-Incorporation Compliance After registering the company, you must complete a few post-incorporation formalities: PAN and TAN: Your company will automatically receive a PAN and TAN once it is incorporated. Open a Bank Account: You will need to open a corporate bank account in the name of the company for conducting business transactions. GST Registration: Depending on your business and the turnover, you may need to apply for GST registration. Cost of Pvt Ltd Company Registration in India The Pvt Ltd registration cost in India depends on several factors like authorized capital, professional fees, and government charges. Below is an approximate breakdown: DSC Cost: INR 800 to INR 1,500 per person. DIN Cost: If not previously obtained, a nominal fee may apply. Name Reservation Fee: INR 1,000 for RUN application. SPICe+ Form Filing: The government fee varies based on the authorized capital. For companies with authorized capital up to INR 1 lakh, the fee is typically around INR 500. Stamp Duty: Stamp duty varies from state to state. Professional Fees: If you hire a consultant or legal advisor, their charges will be additional. In total, the Pvt Ltd registration cost can range from INR 6,000 to INR 30,000 depending on the complexity and capital structure of your business. Conclusion Registering a Pvt Ltd company in India is a straightforward process, provided you follow the necessary steps and ensure all documentation is accurate. By choosing this structure, entrepreneurs gain access to a reliable business entity with numerous benefits, such as limited liability and ease of raising capital. While the pvt ltd company registration cost is a factor, the long term advantages make it a preferred choice for many startups and businesses looking to scale.

private limited company india

How to Register Private Limited Company in India?