At present, many business owners prefer to do Pvt Ltd Company Registration in India for their small business instead of running it as a sole proprietorship. However, as a small business owner, if you are planning to get your company registered as a private limited company, you should know that your company must have a minimum of two shareholders and two directors.
The number of members for your small company should also be between 2-200. All the directors having a Directors Identification Number is a requirement if you want to register your company. If any foreign nationals are involved as members or directors of the company, you must have at least one Indian resident as a director.
Registering your company as a private limited company has several benefits, which is why many small businesses are trying to register their companies. Some of the most well-known benefits of registering as a Pvt Ltd company are:
- Legal Entity: When you register your company as a Pvt Ltd, it becomes a separate legal entity with its own asset, profits, and liabilities. Since the company's assets are different from personal assets, any loss you incur will not affect your personal assets.
- Raising Capital: It is easier for PLC to do it when you plan to raise funds through equity. This is because it provides a sense of belonging and trustworthiness instead of raising funds as a sole proprietorship firm owner.
- Limited Risk to Personal Assets: As a private limited company, since you have other shareholders, you would be required to pay for the company’s liability only what you have contributed. It keeps your personal asset safe, and you do not have personal liability.
Requirements to Register as a Private Limited Company in India
Once you have decided to register as a private limited company in India, you should have some of the necessary documents and other requirements before it is incorporated. Here are some of the requirements you will need to fulfill and the documents you will need to have:
- Each director of the company should have a Directors Identification Number or DIN that they get from the Ministry of Corporate Affairs (MCA) after applying for it.
- It would help if you had a final name for the company before applying for Pvt ltd status. You will be required to send up to six names to the Registrar of Company to ensure that at least one of the names is available to use.
- You should also have a registered office address, proof of which you will be asked to provide.
- You should also have a DSC or Digital Signature Certificate before applying to register your company. After which, you will be required to register your DSC at the MCA website.
The Process of Registering Your Company as a Private Limited Company
From registering your company to getting it incorporated, the entire process may take up to ten working days, which is why many people choose to get help from a professional firm. The steps in the registration process include:
- DSC: Applying for and obtaining DSC from the MCA website after paying the necessary fee. Having a DSC is crucial as filling out forms and registering your company online.
- DIN: If your company already has directors or someone who is planning to become a director, each of them will require a DIN. You will need identity proofs, address proofs, etc., to apply for DIN. You can do it by filing form DIR-3 or within the SPICe+ form if you have up to three directors.
- Name Approval: If you already haven't sent your company name for approval from the ROC, you will need to do that too. You will be asked to provide information like the company's authorised capital, location, and primary objectives. You will also be asked to give a trademark certificate and any logo you might have.
- MOA: Formulating the Memorandum of Association is the next step that describes the company's purpose.
- eMOA and eAOA: If you do not already have an MOA and AOA (Article of Association), you would be able to file for it too.
- PAN and TAN: Apply for PAN and TAN of the company that is crucial to pay taxes for your private limited company. As well as open a current bank account for your company too so that registering process becomes more manageable.
- Verification: Once you submit all the necessary documents and forms, the RoC will verify them before giving the go-ahead.
As a small company, it might be hassling for you to register your company as a private limited on your own. However, at My Legal Clinic, we make the process hassle-free and easy to get through. So, wait no more, get a free consultation session.