A Private Limited
Company is the most common form to carry on a business as an entity intending
to make a profit and enjoy the benefits offered by it, particularly limited
liability. It is a voluntary association of at least 2 and not more than two
hundred members/ shareholders, whose liability is limited according to the
shares held by them. The shares of a Private Limited Company cannot be traded
on public exchanges and are not issued through an IPO, hence the shares of a
Private Limited Company are held privately. The Companies Act, 2013 has granted
a lot of privileges and exemptions to private companies in order to facilitate
ease of doing business in India.
ADVANTAGES OF COMPANY
1.Easy to Incorporate: The incorporation of Private Limited Company earlier used to involve huge time and cost for a businessman. But now the Ministry of Corporate affairs has come out with web form SPICE+ for Company Incorporation. The Web form provides various registration through one application i.e. PAN Number, TAN Number, ESI Registration, EPF Registration etc.
2. Limited Liability: A Private limited Company provides Limited Liability to all its shareholder’s/ member’s, unlike Proprietorship or Partnership where the liability of its owners is unlimited. In case of Company Registration the liability of the shareholders/ members are limited to the amount that is unpaid on the shares issued to them. Their liability is limited to the extent of the value of shares taken up by them.
3. Minimum Capital
Requirement: There is no such minimum capital
requirement of incorporating a Company.
4. Separate Legal
Entity: A Company is treated as an artificial person.
Therefore, in the eyes of law it is a separate legal entity different from the Directors/persons
acting on behalf of the Company. Being one of the major benefits for registering
a private limited company as the members are not personally liable for the
Succession: As a Company is a separate legal entity,
thus the cessation/ death of director/ or members does not affect the life of
the Private Limited Company. Any member may come or go but the company goes on
6. Foreign Direct
Investment: Every business requires funds for its
survival and growth. Therefore, It is easier to take investment through a
Private limited Company.
7. Ease of Decision:
As the control of the business remains in the hands of the owners of the
Company. Hence, the decision can be taken and executed quickly.
8. Power to sue and be sued: Being a separate legal entity, a private limited company can file a suit against the third party in its own name and the third party may also file suit against it.
9. Transfer of shares:
The shares of a private limited company are free transferable subject to a
condition as may be imposed by the board of directors. Hence it becomes easy to
control the transfer/ dilution of interest and avoid outside interruption in
holding of shares.
How can one register a Private Limited Company in India?
private limited company is an organization which is secretly held for
independent ventures/company. The obligation of the individuals from a Private
Limited Company is constrained to the measure of offers separately held by
them. All the information about Private Limited Company is talked about in the
2(68) of Companies Act, 2013 characterizes privately owned businesses. As
indicated by that, privately owned businesses are those organizations whose
articles of association confine the limit the exchange capacity of shares and
restrict them to buy or subscribes. There are many characteristics of a private
Below are some features of a public company which differs it from Public companies:
Unlimited liability, the risk of individuals is boundless in this kind of privately owned businesses. Owned resources of individuals can be connected and sold when the organization is being beaten up.
Different requirements of Private Limited Company
Members should be in between 2 to 200
Minimum two directors are must and every director should have DIN i.e. Director Identification number
Name should have included Pvt. Ltd on the end of the company’s name
Registered office address is a must.
Digital signature certificate is also must require in the digital world
Professional certificate is also needed like CA, secretary and many more
Various advantages of Private Limited Company
Incorporated association, an organization is made when it is enrolled under the Companies Act. It appears from the date referenced in the certificate of joining. As per the MCA’s company act, Company which owned more than two employees should be registered with full name.
Legal person,well companies are not a person. These are registered under the law and cannot work as their own because it must require some legal person to run it which are chosen by shareholders. These persons are called directors of the board.
Separate Legal entity, an organization has a lawful particular substance and is independent of its individuals. The loan company of the organization can collect their money just from the organization and the property of the organization. They can’t sue singular individuals who are part of the company.
Ceaseless Existence, an organization is a steady type of business association. Its life does not rely on the passing, indebtedness or retirement of any or all shareholder or executive. Law makes it and law alone can break up it. Individuals may come and go however the organization can continue forever
Common Seal/stamp, an organization not being a person can’t sign on the documents unlikely human person. It acts through a characteristic individual who is called its executives/directors. Be that as it may, having a legitimate character it very well may be bound by just those records which bear its sign. Along these lines, the law has accommodated the utilization of regular seal, with the name of the organization engraved on it, as a substitute for its signature.
To conclude Private companies are totally different from public companies and a private company is registered association under the company act of government which is artificial legitimate individual, having a free lawful, element with a ceaseless progression, a typical seal for its signs, a typical capital comprised of transferable shares and conveying highly controlled risk.
Private Limited Company is the most popular and
prominent type of corporate legal entity in India. The Ministry of Corporate
Affairs, the Companies Act, 2013 and the Companies Incorporation Rules, 2014
regulate private limited company registration. A least two shareholders and two
directors are required to register a private limited company. While a corporate
legal entity can only be a shareholder, a natural person can be both a
shareholder and the director.
Besides, foreign citizens, foreign corporate entities
or NRIs may be directors or shareholders with Foreign Direct Investment of a
company making it the preferred entity option for international promoters.
Are you thinking of setting up your business in Delhi?
Do you want to know the process involved in private limited company registration in Delhi?
required for private limited company registration in Delhi
The applicant must mandatorily submit the following
documents along with the identity card and address proof:
Memorandum of Association
Article of Association
Copy of PAN Card
Copy of Aadhar Card
Firm Address Proof like Electricity
Bill or Telephone Bill or anything similar that has full name and address of
the firm in legible language. (not more than two months old)
Rent agreement or Electricity Bill
if the business place is taken on rent duly attached with No objection
Certificate (NOC) issued by the owner.
Process for Private
Limited Company Registration in Delhi
first step is to apply for Digital Signature Certificate (DSC) and Director
Identification Number (DIN)
apply for approval of the name with Registrar of Companies (ROC), Delhi
third step is to apply for Registration in INC-32 forms
last step is to obtain a Registration Certificate.
Following are the steps involved in registering a
private limited company:
1. Obtain DSC
Since we are taking an online route to register a private limited company, Digital Signature is mandatorily required. It is mandatory for all the subscribers and witnesses in the memorandum and article of association. You can obtain Digital Signature Certificate either online or offline from government recognized certifying agencies. There are two category of DSC available, i.e. Class 2 and Class 3. Under Class 2, your identity will be verified against a pre verified database, whereas under class 3, you need to be present in person before the registering authority.
Incorporate a company via Reserve
Unique Name (RUN) form.
Apply for the proposed name through
In an attempt to ease the registration procedure, RUN web service has been introduced by Ministry of Corporate Affairs. While filling RUN form, be extremely careful as it gives you only one chance for applying and in case of rejection of name (based on valid grounds) there is no second chance available. In this case you have to re-file another RUN form by again paying the prescribed fees.
To apply for a name using RUN web from, the applicant
must first create a MCA account. The account is free of cost. After creating
and logging into the MCA account, the registrant can choose “Private Limited”
as the type of company to be registered. He further needs to provide one name
choice and check against the database of MCA to check the availability.
It is important to note that MCA Run System only check
for identical company names. However the Company Incorporation Rules, 2014 says
a company cannot be registered with an identical name. Hence even if the MCA
database shows the availability of name, it does not guarantee approval.
However, with effect from March 23,
2018, Ministry has decided to permit two proposed Names and one re-submission
(RSUB) while reserving Unique Names for the Companies.
You must think carefully before adopting a name
because any name that violates the rules will not be allowed to use.
There’s a list of undesirable names that can’t be used.
If it is
identical with or too closely resembles the following, a suggested name will be
considered as undesirable.
Existing company names and LLPs or names approved by the Company Registrar and LLPs.
A registered trademark or trademark for which others have applied for registration and used it or owned it.
Names are given under and in violation of the Emblems and Names Act, 1950.
Foul words or phrases. Words or expressions used as a derogatory term and offensive to a group of people.
Names with “British India” words.
3. Obtain Director Identification Number for Incorporation
All individuals who are proposed to be the director of
the company should have a valid Director Identification Number. The person
should apply for DIN only through the SPICE from. All the details should be
filled in the SPICE form along with their PAN or Passport details. On
incorporation of the company, DIN will be allocated to the person who has duly
applied for DIN.
If a person already has a DIN and incorporating a new company, SPICE form must still be used and DIN can be entered wherever applicable.
Next, you should choose the operation your Private
Limited Company will engage in. You can decide from any of the alternatives
that you have been given. And if you cannot find the correct option for your
operations, you can select the’ other’ option. It is requested to appoint a
professional so that he/she can help you with drafting memorandum and article
5. Form SPICe (INC-32)
Ministry of Corporate Affairs has introduced Form
SPICe (INC-32) to simply the process for incorporating and registering a
company online. Prior to the introduction of SPICe form, a company is required
to file several documents like DIR-3, DIR-12, INC-1, INC-7, INC-22 for
different registration requirements. Now all these forms have been merged
together in a simplified way.
A professional’s digital signature is mandated to file
the INC-32 form. The professional must certify the correctness of all the
information provided in the form. The professional can be a Chartered
Accountant, Company Secretary, Cost Accountant or advocate.
6. e-MoA(INC-33) and e-AoA (INC-34)
The intention behind introducing e-MoA and
e-AoA is to simply the company registration process in India. e-MoA and e-AoA
stands for electronic Memorandum of Association
and electronic Articles of Association respectively.
The forms need to be filed online on MCA portal and they are linked with SPICe (INC-32). Both of these forms must be mandatorily filed by the subscribers of the Memorandum and Article of associations.
You can apply
for the PAN and TAN of the company through the single SPICe form by using forms
49A for PAN and 49B for TAN. After submitting the SPICe form, the system will
auto-generate PAN and TAN form. All you need to do is download it, attach
electronic signatures and upload both forms to the MCA portal.
If all the information in the form is properly filled
in along with the necessary documents, MCA will approve the registration and a
CIN (Corporate Identity Number) will be given. This CIN can also be tracked on
the MCA portal online.
Ministry of Corporate Affairs has significantly made
the registration process a lot more simple and easier in an effort to spur new
Frequently Asked Questions
1. What is the fee for Incorporation?
The MCA has announced zero fees for incorporation up to 10 lakh of an authorised capital in an attempt to simplify the company incorporation process and encourage new start-ups. Hence, Businesspeople would be able to save a thousand rupees as an incorporation fee. Notwithstanding the announcement of zero fees for the SPICE form, eMOA and eAOA–stamp duties would still be valid for incorporation as before depending on the state of incorporation.
2. What are the changes made in the registration process in 2017 and 2018?
By reducing the forms for name
approval, DIN application and incorporation, the MCA has accomplished
substantial process decrease while enhancing the ease of using SPICe form.
A significant drawback in using the
SPICe form earlier was that Entrepreneurs or Professionals were unable to
acquire previous approval of the name. In the event of refusal of name while
using SPICe Form, they were compelled to redo incorporation paperwork. But now,
MCA has streamlined the name approval process and made it optional by
implementing a web-based method for name authorization called RUN.
3. Can a proposed director of a new company apply for DIN through Form DIR-3?
per the company registration process 2018, DIR-3 form can only be used for
adding a director by existing companies. Hence, due care must be taken by the
professionals to ensure that DIN, through DIN-3 is not obtained for a proposed
director of a new company.
4. What are the documents required for filing SPICe (INC-32)
The following documents are
required for filing SPICe (INC-32):
If the Director or Subscriber is an
Address Proof: It can be Passport, Voter ID Card (Election
Card), AADHAR Card, Electricity Bill, Telephone Bill, Ration Card or Driving
Residential Proof: It can be Bank
Statement, Electricity Bill, Telephone Bill or Mobile Bill.
If the Director or Subscriber is a
Proof: It can be Driving License, Residence Card, Bank Statement or Government issued form of
identity containing address.
Residential Proof: It can be Bank
Statement, Electricity Bill, Telephone Bill or Mobile Bill.
5. What is the time required to register a company?
nowadays a company registration has become a fast track process, it takes
lesser time to register a company online as compared with the old process.
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