Private Limited Company
A private limited company is a very popular form of an entity among Small, Medium, and Large businesses for its ease of setting up and speedy registration process.
A Private Limited Company has gained more prominence post-2013, with ease of setup and quick process company registration has become a choice of many enthusiastic entrepreneurs. A Private Limited company is incorporated under the Companies Act, 2013, Companies Incorporation rule 2014 and is governed by the Ministry of Corporate affairs.
For Incorporating a company minimum of 2 directors and 2 shareholders are required. An individual can be both director and shareholder, however a corporate can only be a shareholder. There is no minimum capital required for Incorporating a Private Limited company. Besides these NRIs, foreign nationals or foreign corporate entities can become a Shareholder and/or Directors with FDI (Foreign Direct Investment) and thus is becoming a first choice or preference for foreign entities to expand and get the benefit of the Growing Market of India.
A private limited company has a unique characteristic over traditional business. It enjoys the benefit of separate legal entity status and perpetual succession. Thus the status of the company is ongoing irrespective of its shareholders.
Why choose Private Limited?
Legal Entity
The company is established under the act, thus it has separate legal status and can enter in to contract in its own name. Shareholders and companies are independent and thus shareholders are not bound by the act of the company.
Perpetual Succession
Since a Company is a separate legal entity, it remains in forgoing existence unless wound up by the law. Thus irrespective of the existence of its owners, the company remains in life.
Foreign Capital
A private company can borrow fund from international sources or even a foreign entity can invest in a company often called as FDI. A company requires to fulfill certain mandatory process and approval from RBI for raising funds through foreign sources.
Transferring Ownership
Ownership in the case of a company can be transferred easily by transferring shares and some formalities.
Better Credibility
The company enjoys better credibility among the lenders. A lender usually gives first preference to private limited over other entities, due to its legal status.
External Funding
Enthusiastic and visionary private companies are well traced by venture capitalists. Other than public limited company this is the only form of business that can raise funds easily.
Process for Registering Private Limited Company
Digital Signature Certificate
Apply for digital signature for proposed directors.
Reserve Unique Name
Reserve Unique Company name using RUN services with the Ministry of Corporate affairs.
Drafting MOA & AOA
Drafting MOA and AOA for the company for specifying the objective, registered address, and other rules of the company.
Form INC-32
Filing all the documents, MOA and AOA with Registrar of companies along with prescribed fees, on approval Incorporation Certificate will be issued.
Documents required for Incorporating a Private Company
1. Photograph of all the Directors
2. PAN Card of all the Directors
3. Passport of Foreign Directors
4. Identity proof of all the directors (Passport/Driving License/Voter ID)
5.Rent Agreement/Sale deed/NOC of a landlord and Electricity bill or any other utility bill for the address proof of the registered office of the company. (Not older than 2 months)
Details required for Incorporating a Private Company
1. Email ID and Contact number of all directors and company
2. Qualification of Directors
3. Place of Birth of Directors.
4. Proposed Name of Company. (Check Name availability here)
5. Nature of business
Other Requisites:
1. Must have a registered office in India.
2. Declaration from directors