In India, registering a Private Limited Company (PLC) involves several steps and legal requirements. A Private Limited Company is one of the most preferred types of business entities due to its advantages like limited liability, separate legal identity, and ease of raising funds. Here's a step-by-step guide to register a Private Limited Company in India:
1. Eligibility for Private Limited Company
Minimum 2 directors: At least two individuals who are not minors and at least one of them must be a resident of India.
Minimum 2 shareholders: Can be the same as the directors or different.
Maximum of 200 shareholders.
No public subscription of shares.
The company name should end with "Private Limited" (e.g., ABC Technologies Private Limited).
2. Obtain Digital Signature Certificate (DSC)
Every director and shareholder of the company must obtain a Digital Signature Certificate (DSC) as it is required for signing electronic documents during the registration process.
3. Obtain Director Identification Number (DIN)
Every director needs to obtain a Director Identification Number (DIN). It is a unique identification number assigned by the Ministry of Corporate Affairs (MCA) to directors of Indian companies.
This can be applied through the SPICe (Simplified Proforma for Incorporating Company electronically) form during registration.
4. Choose a Company Name
Select a unique company name that reflects the business activities.
The name should not be similar to any existing company or trademark.
You can check the availability of the name via the MCA website or use the RUN (Reserve Unique Name) service to reserve your preferred name.
5. Draft the Memorandum of Association (MOA) and Articles of Association (AOA)
MOA: This document defines the main activities and objectives of the company.
AOA: This document outlines the rules and regulations for the internal management of the company.
Both these documents are required for incorporation.
6. Register the Company with the Ministry of Corporate Affairs (MCA)
SPICe+ Form: The main form used for the registration of a Private Limited Company is the SPICe+ (Simplified Proforma for Incorporating Company electronically) form. This form allows you to apply for DIN, name reservation, incorporation, PAN, and TAN all in one go.
Submission: Submit the required documents and forms to the MCA portal.
7. Documents Required for Company Registration
Identity proof of directors: Passport, Aadhar card, voter ID, or driving license.
Address proof of directors: Utility bill, bank statement, etc.
Photographs: Passport-size photographs of all directors and shareholders.
Proof of business address: Lease agreement or ownership document of the office space.
No Objection Certificate (NOC) from the landlord (if applicable).
8. Certificate of Incorporation
After the successful verification of documents and approval from the Registrar of Companies (RoC), the company will be incorporated.
A Certificate of Incorporation will be issued, which signifies the legal existence of the company.
You will also receive the PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) for the company.
9. Post-Incorporation Requirements
Open a bank account: A separate business bank account should be opened in the company's name.
Apply for GST Registration (if applicable): If your turnover exceeds the prescribed limit, you must obtain GST registration.
Register for other licenses: Depending on the nature of your business, you may need to apply for other licenses such as MSME registration, FSSAI (if food-related), import-export code, etc.
Advantages of a Private Limited Company
Limited liability: The shareholders' liability is limited to the extent of the capital invested in the company.
Separate legal entity: The company is considered a separate legal entity from its directors and shareholders.
Credibility: It has more credibility as compared to a sole proprietorship or partnership.
Ease of raising funds: It is easier to raise capital from investors, venture capitalists, or financial institutions.
Timeline for Registration
The process of registering a Private Limited Company in India usually takes around 7-10 working days if all documents are in order and there are no issues with the name approval or verification.
By following these steps, you can successfully register your Private Limited Company in India. You may also choose to consult a professional (like a company secretary or chartered accountant) to guide you through the registration process for ease and compliance.