Starting a business is the toughest decision one can take but it gives you the maximum fulfillment of your dreams and desires. Your decision to begin your entrepreneurial journey starts with the decision of selecting the right business structure to follow. Anyone can choose a private limited company to build a scalable business. It’s the most famous legal structure for the business with multiple benefits such as limited liability, separate legal entity, ease in share transfer etc.

Private limited company is governed by MCA (Ministry of corporate affairs) under Companies Act, 2013. Private limited company can be registered with minimum of 2 directors and 2 shareholders, where shareholders and directors can be same person. The maximum number of directors can be 15 and the maximum members can be 200.

The shares division depends on the percentage of the capital amount invested in a company. The profit is also divided as per the shareholding of the shareholders.

Key Highlights of Private Limited Company 

• Limited Liability – The limited liability shields the shareholders from personal liability and protects from other risks and losses.
• Attracts more vendors as well as employees
• Procures good investment from reliable investors.
• Increases the potential to grow and expand

• The company can be incorporated with have minimum of 2 directors and maximum 15 directors.
• The number of members cannot be more then 200
• In case of foreign shareholders or directors, at least one director should be the citizen of India.
• Minimum share capital required to form up Private Limited Company is Rs1 lakh. However, there is no minimum cap on paid up share capital

Start your Private Company Registration today!

• The Documents Required for Private Limited Company Incorporation
• Identity proof of all Directors (Aadhar card, Driving License, PAN card, Passport)
• Address Proof all directors (Voter ID card, Passport)
• Address proof of company registered office (Rent agreement, Possession letter etc.)
• Electricity Bill of the registered office building
• Bank statement/ passbook of the directors
• Trademark registration Certificate (if any)
• Key Highlights of Private Limited Company -
• Limited Liability – The limited liability shields the share holders from personal liability and protects from other risks and losses.
• Attracts more vendors as well as employees
• Procures good investment from reliable investors.
• Increases the potential to grow and expand

Step 1: Obtain DSC (Digital Signature Certificate)

• It’s necessary to apply for a Digital signature of the designated partners before starting the private limited company registration.
• The DSC is important as all the documents before submission are required to be digitally signed.

Step 2: Apply for DIN (Director Identification Number)

• The application for DIN is mandatory for each director.
• The DIN application has to make in Form DIR-3.

Step 3: Name Approval and its Reservation

• The private limited company name approval is an important step to establish a company.
• RUN (Reserve Unique Name) form is filled for the reservation of the name given by Private Limited Company.
• The name provided must be as per the rule 8 of Company Registration Act, 2013

Step 4: Preparation of form INC 33 and INC 34

• This step involves the drafting of MOA and AOA. These are drafted under INC 33 and INC 34 respectively.
• If required we can file for ESI, EPF, GST at the same time under the form names AGILE

Step 5: Incorporation of private limited

• For the Incorporation of private limited company, the incorporation forms (INC 33, INC 32, AGILE) are uploaded with SPICe form INC 32. These are to be filled with Registrar of companies of the respective state in which the registered office of the company is located.

Step 6: Approval of the documents

• Once the SPICe form INC– 32 is approved, the registrar provides the company identification number (CIN) along with PAN and TAN of the company

• Limited Liability of shareholder
• Separate Legal Entity: Company legal entity are separate than its shareholders/promoters.
• Perpetual Existence
• Capacity to Sue and to be Sued
• A Private limited company can sale, purchase and own the property like individual on its own name.
• Private limited companies can easily avail financial assistance/borrowing from banks and financial institution compared to another form of entity.
• Easy funding from investors
• Continuity of existence

Benefits of a Private Limited Company

• Shields personal assets from business liability, limits liabilities of Directors.
• The Private Limited Company (Pvt. Ltd) continues to exist even after the death of the Shareholders
• Open doors to raise capital from a venture capitalist, angel investor, financial institutions etc.
• Creates brand value as private limited structure is more transparent compared to other business structures.
• Ownership gets transferred by just transferring shares.
• Private Limited Company is a unique identity, can own/acquire and alienate, property in its name. Property owned could be anything like copyrights, patents, machinery, building, intangible assets, land, residential property, factory etc.

Funding or Borrowing Capital

It’s easy for a private limited company to get funding or borrow capital from angel investors/venture capitalists/banks/ financial Institutes in comparison to other company types.

Liabilities of a Private Limited Company

• A private limited company must hold a board meeting annually
• File annual returns with MCA (Ministry of Corporate Affairs)
• Annual account audit by a CA is mandatory
• Private limited company requires filing the annual return with the Income Tax Department