Private limited company | How to register a private limited company

A private limited company is the most popular legal entity. There are minimums of a two and ‘maximum of fifty members in Pvt. Ltd company. The directors have limited liability to their creditors. In the case of any default banks/creditors can only sell the company’s assets but not the personal assets of directors. The term-limited in the ‘Private limited’ denotes that the liabilities of director and owner is limited. Start-ups and growing companies prefer private limited companies as it allows outside funding to be raised easily, limits the liabilities of its shareholders and enables them to offer employee stock options to pull in top talent.

Private limited company registration is governed by the ministry of corporate affairs under the companies act, 2013. The Private Limited companies are the most recommended types of business entity because it has the ability to raise funds, limited liability, a separate legal entity and is easy to transfer.

What are the basic requirements to start a private limited company?

• A company should have a unique name to register as a private limited company.

• The name should be unique in a way that is not equivalent to any other registered company or trademark.

• And it is also mandatory to add private as a suffix at the end of the name of the company.

• It is required that a private limited company should have a minimum of two directors and necessarily two shareholders.

• The annual paid to a private limited company should have capital of 1 lakh rupees or more than it which should be prescribed from time to time.

• It is also required that all the members of the private limited company should have a digital signature certificate.

Who can be the owner of {Private limited person company}?

An individual, who is born and is a resident of India or has lived in India for at least more than 3 months days in India can become a member of the one-person company.

Who can be a director?

An individual qualified under the Indian Companies Act, 2013 to be a director, holding the valid Director Identification Number (DIN) can be a Director of a

private limited company.

Who can be the nominee?

For the uninterrupted existence of the company, the company act 2013 prescribes to appoint a nominee for the company. A nominee shall be individual and it can be appointed at the time registration of the private limited company. The nominee appointed for one person company can also be changed at any time after the incorporation

Benefits of private limited company registration

1. A private limited company has the advantage of limited liability protection. A member (Shareholders/Directors) has no personal liability to the creditors of a for the company’s debt.

2. A private limited company is a legal entity, established under the Companies (Act 2013).

3. Easy transfer ability: The ownership of the firm can easily be transferred by easily transferring the shares of the firm.

4. Existence: The existence of the private limited company is perpetual and it exists forever. A private limited company will keep on existing in the eyes of law even if it becomes insolvent or bankrupt.

Annual compliances of Private limited company

• Income Tax Return an annual return filing must be completed by all before 30th September of each financial year.

• GST Filing: Under the GST regime proposed to be rolled out in 2017, one person companies having would be required to file monthly, quarterly and annual GST returns.

• TDS Filing: Quarterly must be filed by one person companies that have TAN and are required to deduct tax at source as per TDS rules.

• ESI Return: ESI return must be filed by all one-person companies having ESI registration is required once the one person company employs over 10 employees.

What is the procedure of a private limited company?

1. Apply for DSC: The first step in the one person company registration is to obtain the Digital Signature certificate. It is the digital format of the following documents

Address Proof

Aadhaar card

PAN card

Photo

Email Id

Phone Number

2. Apply for DIN: After obtaining DSC the next step is to register for the Director Identification Number. DIN is the 8 digit identification number by provided central government anyone intending to be director of any company. It is valid for Lifetime as long as the person remains the director of the prescribed company.

3. Name Approval Application: The next step in private limited company registration is to decide on the name of the Company. The name of the Company will be in the form of ____ private limited. It is required to add a suffix of Pvt. Ltd. at the end of the name of the company.

4. Documents Required: The next step is to prepare all the documents which are required for the private limited company. Following are the documents which are required for one person company registration-:

a. Memorandum of Association ( MOA): MOA are the objects to be followed by the Company or stating the business for which the company is going to be incorporated. It basically prescribes all the objectives of the company.

b. The Articles of Association (AOA): It lays down the by-laws on which the company will operate.

C. Registered office proof

d. PAN card of the director

e.Scanned passport size photo of the director

f. Bank statement of the director

5. Filing of forms with MCA:

All these documents will be attached to SPICe Form, SPICe-MOA and SPICe-AOA along with the DSC and DIN to be uploaded on MCA site.

After uploading, Form 49A and 49B will be generated for the PAN and TAN generation of the Company which have to be uploaded to MCA after affixing the DSC of the proposed Director.

6. Issue of the certificate of Incorporation:

On verification, the Registrar of Companies (ROC) will issue a Certificate of Incorporation and you can commence your business activities.

Annual compliances