Private Limited Company is one of the most preferred forms of business in India. Statistics show that out of all the companies being incorporated in India, 93% are being registered as the Private Limited Company. Ministry of Corporate Affairs (MCA) is the governing body which regulates all the Private Limited Companies in India and has stated a certain pre-requisite for private company registration.
This article covers all the pre-requisites that need to be fulfilled before opting for the Private Limited Company Registration. The article is essential for the upcoming entrepreneurs who are planning to go in for registration of a private limited company.
The Private Company
Before going into the nitty-gritty of the pre-requisites of the Private Limited Company registration, it is important to understand the meaning of the term ‘private company’ which is provided under section 2 (68) of the Companies Act, 2013.
Simply put, the term ‘private company’ means a company which restricts the right to transfer its shares; limits the number of its members to 200 and prohibits any invitation to the public to subscribe for any securities of the company.
Pre-requisite of Private Company registration
Given below is a detailed pre-requisite list for registering a Private Limited Company –
Minimum shareholders requirement
One of the key pre-requisite to start a private limited company is to have at least two shareholders. Note that the maximum number of members in a private company can not exceed 200.
- Directorial requirement
Minimum 2 directors are necessary for incorporating a Private Limited Company, and this can go up to a maximum of 15 directors.
- Obtaining Digital Signature Certificate
Digital Signature Certificate is a physical signature in an electronic format. For incorporating a Private Company, it is necessary to obtain Digital Signature Certificate of the directors in order to digitally sign the e-forms.
Following documents are required for obtaining digital signature certificate
- Passport size photograph.
- Identity Proof like PAN card, Aadhar card, etc.
- Address Proof like Election card, passport or electric bill etc.
*Note: Digital signature can be obtained within 1-2 business days.
- Obtaining DIN (Director Identification Number)
Each director is required to obtain the Director Identification Number. However, any person who is proposed to become the first director in a new company should make an application for DIN through eForm SPICe.
In any other case, for obtaining DIN, the person is required to file E-form DIR-3. Following documents are required while filing eForm DIR-3:
Passport size photograph.
Identity Proof like PAN card, Aadhar card, etc.
Address Proof like Election card, passport or electric bill etc.
The Documents required for the formation of Private Limited Company
Pre-requisite documents for Private Company are the essential requirement when dealing with the formation of the company. If all the required documents are available on hand, incorporation procedure becomes quite easy. Following is the list of documents required for the formation of a private limited company –
|Basic documents||PAN Card and Passport size photograph.|
|Proof of Identity||PAN card, Aadhar card, Passport, Driving licence, Ration card, Election ID (any one document needs to be submitted).|
|Proof of address||Bank statement Passbook (updated) with first and last bank entry page, Electricity bill Telephone/mobile bill, Utility bill (Bill should not be older than 2 months)|
|Proof of registered office address||Self-owned premises – Sale/property deed Electricity/Telephone/ Gas/ Water bill (Bill should not be older than 2 months)municipal tax paid receipt. Rented premises – Rent agreement, objection certificate (NOC) from the owner of the premises|
In case any of the director/ subscribers is a foreign national, then, the following documents are required:
- Proof of address – driving licence, residence card, bank statement, Government issued a form of identification containing an address.
- Residential Proof- Along with proof of address, a proof for a place for residence shall be submitted which can be any of these: Bank Statement, Electricity Bill, Telephone Bill, Mobile Bill.
Steps for the formation of the private limited company
STEP 1 – Application for the name approval through RUN (Reserve Unique Name)
- Visit MCA Website;
- Provide appropriate user id and password;
- Click on ‘RUN’ option in MCA services [RUN stands for Reserve Unique Name];
- Application form for name approval would be displayed;
- Details required for filling up the application form are:
- Entity type;
- CIN, if applicable;
- Proposed name;
- Choose File, if applicable.
- Submit the form after re-confirming all the details provided and payment of application fees of INR 1000/-.
- Name approval can be obtained within 1-2 business days
STEP 2 – Filling up of E-form SPICe (INC-32)
SPICe [Simplified Proforma for Incorporation of Company Electronically] is the form for incorporation of the companies. Following are the documents/ details that are required to be provided for filing E-form SPICe
- Affidavit in INC – 9 and declaration by the first subscriber and directors.
- Declaration in form DIR-2 from the first directors for consent to act as a director. Copy of proof of identity and proof of residential address is also required.
- Office address proof like a rent agreement, lease deed etc.
- NOC from the owner for the registered office.
- Copy of the utility bills like the gas bill, electricity bill, telephone bill etc. which should not be older than two months;
- It is a mandatory requirement to attach identity proof and residential address proof of the subscribers in the absence of DIN of the directors/ subscribers.
- Director’s declaration regarding non-acceptance of deposits;
- In case any director has any interest in the proposed company, it is mandatory to attach a certified true copy of NOC obtained by way of the board resolution.
Some of the important points to be taken care of before / while filing INC – 32
- E-form can be re-submitted only two times;
- The total period of re-submission of the documents shall not exceed 30 days;
- The applicant can apply for a refund of money by filing refund form, in case of rejection of application;
- Size of e-form should not exceed 6 MD;
- The total number of directors who are not having DIN cannot be more than 3.
If INC-32 filed is found complete, the company would be registered and CIN would be allocated. Directors who do not have valid DIN would be allotted appropriate DIN to the maximum of 3 Directors.
STEP 3 – Filling of MOA in E-form SPICe (INC-33) and AOA
The above must be filed in E-form SPICe (INC-34). It must be noted that INC-33 and INC-34 are to be filed as a linked form with SPICe (INC-32).
Time limit to form the Private Limited Company
There is no minimum specified time limit under the company law, however, if all the documentation is ready and all goes well, it can be incorporated within a period of 8-10 working days.