Private Limited Company Registration Process – A Simplified Guide

Registering a company in India is the first important step in your journey toward becoming an entrepreneur. And company registration process is not as complicated as you think. Of course, there are processes to follow and documents to submit, but once you have the clarity of how to do them, you will get through the whole company registration process fairly easily and quickly. So keep reading and understand how to register a private limited company easily!

Table of Content

Minimum Requirements for PLC Registration Simplifying the Company Registration Process Certificate of Incorporation Document Checklist Post Registration Compliances

Minimum Requirements for Company Registration Process

Before we get into the company registration process, here are the 4 basic requirements for registering a private limited company in India.

1. Minimum 2 directors

As per the Companies Act, 2013, one director must be an Indian resident who has continuously stayed in India at least for 12 months (as recently amended). Another one can be a foreign or Indian resident.

2. Minimum 2 shareholders

Shareholders can be a person or corporate entity. In the case of a corporate entity, a person is authorized to represent the company as a shareholder.

3. Registered office address in India

The Registered Office (RO) of the company must be in India. And, the company can choose a commercial or residential property as their RO Address.

4. Unique business name

Entrepreneurs are very particular about the name of their company. However, they need to make sure that it is unique enough. The name should also have a suffix that talks about the business of the company for example- Mother Dairy Fruit & Vegetable Pvt Ltd.. The name itself determines that the company deals with dairy products, fruits and vegetables.

Read More: How to Reserve Unique Name for your company over MCA?

Simplifying the company registration process

Under the Companies Act, 2013, the Ministry of Corporate Affairs (MCA) governs the registration of PLCs. It is concerned with the proper functioning of rules and regulations as per the law. MCA Registration form fees depend upon two factors i.e, Stamp Duty and Normal Form filing fees. Since Stamp Duty differs according to authorized capital and state in which the company is incorporated, the minimum form fees of PLC registration start from INR 2000. We at LegalWiz.in help entrepreneurs set up PLC in just 4 Steps:

The 4-step process begins with the application for a Digital Signature Certificate (DSC) and filing the SPICe+ forms. Let’s go stepwise!

Step 1:  Applying for Digital Signature Certificate (DSC)

Every director and shareholder of a private limited company needs to acquire a Digital Signature Certificate (DSC) as per the Ministry of Corporate Affairs (MCA). This DSC will be used on all the documents for filing the e-forms in a secured manner, as directed by the Information Technology Act, 2000. The first step is to acquire DSC to submit the electronic documents securely. DSC is acquired from the Controller of Certification Agencies (CCA). The minimum validity is 1 year. However, one can extend the validity to 2 years.

Every applicant needs to furnish the following individual details for applying for DSC:

• Passport-sized photographs
• PAN (Permanent Account Number)
• Aadhaar Card
• Phone Number
• Email Address

In case one or more directors or shareholders are foreign nationals, their notarized and apostilled documents will also be required.

Step 2: Applying for Name Reservation (SPICe+ Part A)

You must have already thought of a few name options for your company. Pick the best two to fill in the SPICe+ Part A form, which is primarily used to reserve a unique company name for your new private limited company. You’ll need the help of practising professionals to fill out and submit this form. In the first go, you can pick 2 name options.

The SPICe+ Part A form has the following fields:

1. Type of Company: Select ‘Private Limited Company’ from the different types of company structures listed down in the form. Other business structures include Producer Company, Unlimited Company, Section 8 Company, IFSC Company, Nidhi Company etc.

2. Class of Company: This section signifies whether a company is public, private, or one person. We choose ‘private’.

3. Category of Company: Choose if you’d want the company to be limited by shares, by guarantee or have unlimited shares. The most popular one is to keep the company limited by shares.

4. Sub-category of Company: Choose the relevant sub-category with the help of the practising professional.

5. Main division of industrial activity: Which industry will you be operating in? The MCA has designated distinguishing codes to the main divisions. Choose the one that fits your business with the help of the practising professional.

6. Description of the main division: This is where you explain your business idea, and specify the purpose of the products and/ or services that you’re going to offer to your customers in a detailed manner.

7. Proposed name of the company: You can propose 2 names here which you’d like to keep as your company name.

And done! Once submitted, the MCA will take 2-3 working days to approve your SPICe+ Part A form. If both the suggested names get rejected or questioned, you will get a second chance to file for 2 more company name options of your liking.

In case all your 4 name choices get rejected, you will need to file the SPICe+ Part A form all over again. Pro Tip: Come up with very unique brand name choices and check company name availability beforehand. Before filing the form, one should check if a company with a similar name is already registered or not on the MCA portal.

Once the names get approved, the SPICe+ Part B form will be made available to you to move further with your company incorporation process.

Step 3: Filing Details for the Proposed Company (SPICe+ Part B)

SPICe+ Part B form is where you fill in the most important details about your business. Make sure all the details are provided to the practising professional correctly. SPICe+ Part B needs to be filed in 8 parts:

1. Capital Details: To begin with, you need to provide the details of the total capital that you are bringing in the business, which is typically called authorized share capital. Also, provide the correct details of the subscribed share capital that is subscribed by the shareholders.

2. Registered Office Address: Next, you need to provide the address of the office from where the company will be operating along with the contact details and Email ID.

3. Subscriber and Directors’ details: Provide the DIN (Director Identification Number) of every Director of the company. If you don’t have one, you can acquire it with the help of a practising professional.

4. Stamp Duty: Based on your authorized capital and registered address of the company, every state and union territory calculates government charges to register a company. The practising professional will help you out in knowing the exact Stamp Duty amount payable.

5. PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) Application: Your company needs PAN and TAN accounts to carry out business operations and file the taxes levied by the government.

6. Attachments: Provide the necessary documents in the correct formats to be uploaded as attachments for further verification. The documents required will be mentioned but make sure you collect the most important ones beforehand like a utility bill, identity and residential address proof of the first director and shareholder, director consent and NOC (No Objection Certificate) from the owner of the registered address etc.

7. Declaration: We’re almost done here. Just provide your digital signature to declare that you follow the guidelines of the Companies Act 2013.

8. Declaration and Certificate by Professional: At the end of the SPICe+ Part B form, the practising professionals like CA, CS, or CMA helping you out with the company registration process will be required to provide their digital signatures.

Step 4: Drafting and Filing of Incorporation Form

An Incorporation Form will be drafted and filed as per the important clauses of SPICe+ MOA (Memorandum of Association) by the practising professional. Let’s understand the clauses briefly and quickly!

SPICe+MOA (Memorandum of Association):

Name clause: You need to mention the selected name of your company and the use of the word “Private/Pvt Limited” after the company name.

Registered office clause: This clause identifies the state where you have registered your company.

Object clause: It is the most important clause as you need to mention the main object- that is your idea to deal with the business activities.

Liability clause: This clause determines that the member’s liability is limited by shares.

Capital clause: Your authorized capital and the share capital of the company is mentioned.

Subscriber clause: You need to mention the details of the first shareholder and the number of subscribed shares.

Once this is done, the subscribers and professionals affix the DSC to submit with the MCA for approval.

SPICe+AOA (Articles of Association):

Then comes the SPICe+ AOA (Articles of Association)

Provide the following details correctly to be filled under the Table F of the company:

• The name of the company is auto-filled
• Clause 1: The interpretation of your company
• Clause 60: Mention the details of the company

This form also defines the power and responsibility of the director, management decisions, transfer of shares, dividend policy and many more important details related to the company structure.

Same as MOA, the professionals affix their own DSC as well as the director’s DSC to submit with MCA for approval.

AGILE-PRO-S

The AGILE-PRO-S form is another important step in the company formation process. It needs to be filed in order to register GST number, credentials for EPFO (Employees Provident Fund Organisation) and ESIC (Employee State Insurance Corporation). Also, depending upon the state where your company is being registered, you need to intimate the bank account and shop and establishment license. All these can be done with a professional’s help.

After filling all the abovementioned forms, INC-9 will be generated automatically as a declaration form..

Once the above process is completed, the challan is paid with Stamp duty and government fees. If there are no issues, MCA grants the Certificate of Incorporation (COI). 

Certificate of Incorporation

After due verification of your application and the documents provided, the MCA grants the Certificate of Incorporation (COI). It is conclusive proof of the existence of the company, wherein the date of Incorporation, Company Identification Number (CIN), PAN, and TAN are mentioned with the sign and seal of the Registrar. Further, DIN is allotted to directors with the approval of registration.

The receipt of CIN is sufficient proof of the legal existence of your business and now you are authorized to carry out the business activity you set out to do..

Document Checklist

Here is the list of all the documents of directors/shareholders that are required to register a company in India.

For Indian Nationals

• Self-Attested PAN card copy of all the Directors and members
• Passport size photograph
• Copy of Aadhar Card
• Self-Attested Proof of Identity of Directors and members (Voter ID/Passport/Driving License)
• Self-Attested Address proof which should be in the name of the Director or shareholder (Mobile Bill/Telephone Bill/Electricity Bill/Latest Bank Account Statement showing name & address along with the last page of transaction with recent activities)

For Foreign Nationals

In the case of a foreign director/shareholder, all the documents should be notarized and apostilled.

• Passport size photograph
• Foreign national subscribers need to provide a passport as nationality proof
• Address proof including, Driving License/Bank Statement/utility bill not older than 2 months

Documents for Registered Office

• Business address proof (Electricity Bill/Telephone Bill/Water Bill/Gas Bill) should not be older than 2 months.
• Copy of Rent Agreement (in case of rented property)
• No objection Certificate from the owner of the Property

Post Registration Compliances

After the incorporation of the company, compliances are one of the areas that need to be done so that entrepreneurs can focus on core activities. Moreover, it helps organizations to make a proper system that defines the roles and duties of directors and shareholders. Read more about how Professionals and experts at LegalWiz.in help startups to keep post-registration compliances up-to-date.

This sums up the company registration process successfully. We hope this helped you understand how to register a private limited company in India and you are ready to begin your entrepreneurial journey. In case you need further clarity or support, you can drop an inquiry below. We’ll be happy to be a part of your dream venture.