What is a Private Limited Company?
A Private Limited Company (Pvt Ltd Company) is a type of business entity registered under the Companies Act, 2013. It is a separate legal entity from its owners and is privately held by shareholders.
A Private Limited Company has its own legal identity, which means it can own property, enter into contracts, sue, and be sued in its own name.
Benefits of Forming a Private Limited Company
- Separate Legal Entity: The company is legally separate from its directors and shareholders.
- Limited Liability Protection: Shareholders’ liability is limited to the amount invested in the company.
- Better Business Credibility: Private limited companies are generally considered more professional and trustworthy.
- Easy Fund Raising: Investors, banks, and venture capitalists prefer investing in private limited companies.
- Perpetual Succession: The company continues to exist even if directors or shareholders change.
- Easy Transfer of Ownership: Shares can be transferred to other persons subject to company rules.
- Tax and Business Benefits: Companies may get various startup, MSME, and tax-related benefits.
Eligibility for Private Limited Company Registration
To register a private limited company in India, the following minimum requirements must be fulfilled:
- Minimum 2 Directors
- Minimum 2 Shareholders
- At least 1 Director must be an Indian resident
- Registered office address in India
- Unique company name approved by MCA
- Directors must have:
- PAN Card
- Aadhaar Card
- DIN (Director Identification Number)
- DSC (Digital Signature Certificate)
A person can be both shareholder and director.
Process of Private Limited Company Registration
Step 1: Obtain Digital Signature Certificate (DSC): Required for online filing of company registration documents.
Step 2: Apply for DIN: Director Identification Number is allotted to directors.
Step 3: Name Approval: Apply for reservation of company name through MCA portal.
Step 4: Draft Incorporation Documents:
Prepare:
- MOA (Memorandum of Association)
- AOA (Articles of Association)
Step 5: File Incorporation Application : Submit SPICe+ forms with required documents on MCA portal.
Step 6: Certificate of Incorporation
After approval, MCA issues:
- Certificate of Incorporation
- CIN (Corporate Identification Number)
Step 7: Apply for PAN, TAN & Bank Account: PAN and TAN are generally issued along with incorporation.
Documents Required for Private Limited Company Registration
Documents of Directors & Shareholders
- PAN Card
- Aadhaar Card
- Passport size photograph
- Email ID and mobile number
- Address proof
(Bank statement, electricity bill, passport, etc.)
Registered Office Documents
If Premises is Rented:
- Rent agreement
- Electricity bill/water bill
- NOC from owner
If Premises is Owned:
- Property ownership proof
- Electricity bill/water bill