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Private Limited Company Registration in India – Online Process

More than 6,000 entrepreneurs in India trust LegalWiz.in to register a Pvt Ltd Company and keep their businesses compliant. Start your new company registration with the most affordable pricing, dedicated account management support, and a quick turnaround guarantee.  A team of expert CA, CS, and Lawyers help you step-by-step to incorporate your startup company.

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INTRODUCTION

Incorporate as a Pvt. Ltd. Company in India

Private Limited Company registration (PLC registration) is a popular way to start a business in India. It offers benefits like limited liability protection to founders, separate legal existence, better credibility, and ease in raising external funds. Hence, Startups and progressive businesses, with higher risk and growth aspirations, prefer a company structure. It is registered with the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013.

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What is a Private Limited Company?
BENEFITS

Why Should You Register a Private Limited Company?

Documents Required for Private Limited Company Registration Online

How to Decide a Company Name

Unique Name

Distinct name that is not an already registered company or trademark stands a better chance of name approval from MCA

Business Activity

The second part of the name should ideally suggest the business activity of the company

Name Suffix

The name of the company shall end with Pvt. Ltd. or Private Limited Company

Read More About Deciding Company Name
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Incorporation Timeline

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Pick a Business Structure That Works Best For Your Business

Private Limited Company One Person Company Limited Liability Partnership Partnership Firm Proprietorship Firm
Applicable Law Companies Act, 2013 Companies Act, 2013 Limited Liability Partnership Act, 2008 Indian Partnership Act, 1932 No specified Act
Registration Mandatory Mandatory Mandatory Optional No
PLC must be registered with MCA under the Companies Act Same as Private Limited Company LLP must be registered with MCA under the LLP Act Partnerships can be registered or Unregistered, there are obvious benefits to register with the State ROF No registration required. Registration under MSME or GST act are considered valid for Proprietor Firms
Number of Owners 2 – 200 Only 1 2 – Unlimited 2 – 50 Only 1
Minimum of 2 to maximum of 200 shareholders excluding present or former employees who are members Only one shareholder Minimum 2 Designated Partners are required. No limit on the number of maximum partners Minimum 2 partners, and maximum 50 partners The proprietor can be the only owner of the firm
Separate Legal Entity Yes Yes Yes No No
PLC is a separate legal entity, and can enter into contracts or own assets in it’s own name Same as Private Limited Company Same as Private Limited Company Partnership firm does not have any separate identity from its partners Proprietor and business are the same, and hold same PAN number
Liability Protection Limited Limited Limited Unlimited Unlimited
Limited to the share capital subscribed (may vary if defined as limited by guarantee or unlimited liability in the MOA) Same as Private Limited Company Limited to the capital contribution agreed by the partner in the LLP Agreement Partners are jointly and severally liable to pay the debts of the Partnership Firm Paying off the liabilities of the firm is the proprietor’s responsibility
Statutory Audit Mandatory Mandatory As Applicable Not Mandatory Not Mandatory
Required to appoint a statutory auditor within 30 days of company incorporation Same as Private Limited Company Statutory audit required when turnover exceeds INR 40 Lac or contribution exceeds INR 25 Lac No statutory audit required. Tax audit applicable on basis of total turnover Same as Partnership Firm
Ownership Transfer Yes Yes (Restricted) Yes Yes (Restricted) No
Shares are easily transferable, so it makes it a most preferred option for raising capital through external investors There is only one owner in OPC. 100% shares need to be transferred to change ownership Ownership can be changed with consent of other partners, by drafting a supplementary agreement Ownership is not easily transferable. Partnership deed outlines the restriction for transfer of ownership Ownership of the proprietorship is not transferable
Perpetual Existence Yes Yes Yes No No
Private Company prevails with change in ownership or management OPC has a perpetual succession, but can only have one owner at any time Change in Partners or Designated Partners does not affect the existence of an LLP Change in partner leads to dissolution or formation of another partnership firm Death or insolvency of proprietor dissolves the business
Foreign Ownership Allowed Not Allowed Allowed Allowed Not Allowed
Foreign nationals can invest as per RBI and FEMA guidelines, usually under the Automatic Route Member, nominee and director must be an Indian resident Foreign nationals can invest as per RBI and FEMA guidelines, usually under the Automatic Route Nnon Resident Indian (NRI) can be a partner in the Partnership Firm, subject to RBI regulations Foreign Nationals cannot own proprietorship business in India
Taxation Liability Moderate Moderate High High Low
Lower rate of 25% for companies with gross turnover of INR 400 Crore. Additional dividend distribution tax may apply Same as Private Limited Company Tax rate of 30% on business profits, tax benefits to partners on profit distribution is high Same as LLP Tax rates for individuals apply to Proprietorship Firm, as per the Income Tax slab
Compliance Requirement High High Moderate Low Low
Private company has the highest compliance requirements, both annual and event based OPC compliance requirements are similar to PLC, except conducting an Annual General Meeting (AGM) Annual filing and few event based filings are necessary, but lesser compliance requirements as compared to company structure ITR of partnership needs to be filed annually, no major compliance requirements otherwise No requirement to file a separate ITR. Very less to no compliance hassle
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FAQs

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2022-06-28T11:47:25+00:00
  1. Minimum two directors and shareholders. One shareholder and director must be an Indian citizen and resident
  2. A valid Registered Office Address for the business
  3. Documents for shareholders and directors in a clear and legible format
  4. Name of the company as per the MCA guidelines
  5. Minimum authorized and paid-up capital
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There is no minimum Paid-up capital requirement to start a Private Limited Company. However, per the Companies Act, a company needs to keep a minimum Authorised Capital of ₹1 Lac divided into 10,000 equity shares with a face value of ₹ 10 each. Each shareholder must subscribe to at least 1 share to introduce a sufficient amount for running the business. The paid-up capital needs to be deposited in the Current Account of the company as Share Capital.

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Authorized capital is the maximum amount of capital that a company can raise by issuing shares at present or in the future. Authorized capital can be increased later as well if the company wishes to raise funds through the issue of fresh equity. Stamp duty for company registration is paid on the authorized capital.

Whereas, the Paid-up Capital refers to the actual amount paid by the shareholders for issuing shares. One can incorporate a company in India by any amount of paid-up capital which can be less or equal to the authorized capital.

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Director Identification Number (DIN) is a unique number assigned by the Ministry of Corporate Affairs (MCA). It is issued to Individuals who want to elect as directors in a company or a designated partner in an LLP. There is only single DIN issued to an individual. DIN can be surrendered at any time with the help of filing appropriate forms with MCA. All DIN holders need to comply with DIR 3 KYC filing for DIN Activation process every year.

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Digital Signature Certificate (DSC) is a token issued by the Certified Authorities. A DSC is an eSignature used for filing forms with MCA by the directors, promoters, and shareholders. All the directors and the subscribers to MOA (promoters of the company) need DSC for submitting e-forms for incorporation. Director’s DSC is also used while filing GSTR, ITR, and ROC forms.

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Yes, you can use your residential address to register a Private Limited Company. Either the latest Utility Bill (Electricity, Telephone, Gas, and Water) or Property Tax Bill of the address can be provided as a Business Address proof. In case the property is owned by another family member, you need to attach an NOC in the form. A registered office is a place where the business receives communication from the MCA and other concerned authorities. This address is displayed on the portal of the Ministry as well.

Also, the residential address used for commercial purposes may attract property tax applicable to commercial properties.

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Yes, a Private Company can carry multiple businesses within the same field or of similar nature. It should be mentioned in the company’s MoA and approved by a registrar. Though, companies shall not include Activities that are unrelated. For example, fashion designing and event management are very different business activities, and can’t be categorized as the main business activities for the same company.

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Once the company is registered, it should fulfill the following requirements on priority:

  1. Open a current bank account within 30 days after receiving the PAN card.
  2. Appoint First Statutory Auditor for the company.
  3. Deposit paid-up capital as mentioned in the MoA of the company.
  4. Issue and allot shares to the subscribers.
  5. File INC-20A within 180 days of receipt of COI.
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  1. Professional Tax Registration is mandatory only for new companies incorporated in Maharashtra, Karnataka, and West Bengal.
  2. Shops and Establishment Registration is optional. Also, it is available only for new companies incorporated in Delhi. But, it is recommended to opt for registration as the website of the Labour Department will not provide the service to apply for First Time Registration.
  3. It is mandatory for all the new companies incorporated using SPICe+ to select a Bank for opening a current account. At present, many Banks are integrated with AGILE-PRO-S for opening a Bank account. Punjab National Bank, ICICI Bank, SBI, Kotak Mahindra Bank, Bank of Baroda, HDFC Bank, INDUS IND Bank, UBI Bank, and Axis Bank to name a few.
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Authorities like Employees State Insurance Corporation (ESIC), Employees Provident Fund Organization (EPFO), GST Department, Bank, NSDL, Income Tax Department, Commercial Tax Department of respective states for PT Registration, and Labour Department get the details of the new company that is incorporated. Additionally, the basic details of the company and directors are published by MCA on its portal under the section “Master Data”.

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