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Private Limited Company Registration
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An Overview of Company Registration
One of the many essential aspects of running a business is deciding on the legal status of the business entity and acquiring appropriate registration. Incorporating a business as a company has nimiety of benefits attached to it. Companies incorporated under the Companies Act 2013 have a separate legal entity, perpetual existence, higher credibility and directors and shareholders have limited liability. To register a company under the Companies Act 2013, it needs to be registered with the Registrar of Companies as per the guidelines and norms laid down by the Ministry of Corporate Affairs. Depending on the business model, companies receive many benefits and exemptions from the government. One can obtain a company registration online through the Ministry of Corporate Affairs website.
Different Types of Business Structures in India
Following are the different types of Business Structures in India:
- One Person Company: In India, One Person Company is the best way to commence a company if there are only one person or owner. OPC enables a sole proprietor to carry their work and still be part of the corporate background.
- Private Limited Company: A Private Limited Company is considered as a separate legal entity from its founders. It has shareholders and directors. Each individuals is considered as an employee of the Company.
- Public Limited Companies: Public Limited Companies are corporate entities that are incorporated under the Indian Companies Act. They have a separate legal identity & are considered to be different from their owners. The owners of a Public Limited Company are termed as Stakeholders or Shareholders of the Company.
- Limited Liability Partnership: It’s a separate legal entity where the partners’ liability are only limited to their agreed contribution. A Limited Liability Partnership is established under the Limited Liability Act, 2008 with the ROCs.
Note: These business structures are one of the best structures to start a company in India. You can choose any of the above business structures as per your business needs. There are some other forms of business structures like HUF (Hindu Undivided Family), Partnership Firms, and Sole Proprietorship. But these structures do not come under the Company Law.
Benefits of Company Registration in India
As mentioned above, there are many benefits of Company Registration over other business models. Some of the many advantages of Company Registration with the Registrar of Companies are as follows:
- Separate Legal Entity
A company duly registered is considered an artificial person and has a separate legal entity, which is distinct and wholly different from its members. A company can own assets in its name, incur liability, sue, and be sued in its own name.
- Limited Liability of Members
The liability of the company’s members is limited and extends only to the face value of shares of the company owned by them. This means that if the company is in debt, the responsibility of members to repay that debt extends only to the value of shares held by them and shall not extend to their personal assets.
- Perpetual Existence
Since a company has a distinct legal identity which is separate from its members, it can exist in perpetuity even after the members leave the company. Once incorporated, a company shall continue to survive until it is wound up, irrespective of whether the death or insanity or insolvency or retirement of the founding members or directors or shareholders of the company.
- No Minimum Capital Requirement
There is no minimum paid-up capital required to incorporate a private limited company. A company’s capital structure is flexible and can be altered at any time to receive more funds when needed. It can raise funds either through debentures or through venture capitalists or angel investors.
- Exemptions for Certain Companies
Based on the business model of the company, the Central Government grants certain exemptions to companies which are operating for charitable purposes. NGOs and other not-for-profit organizations registering as Section 8 companies receive many tax benefits and exemptions.
- Higher Market Credibility
A company duly incorporated as per the MCA norms has higher credibility in the marketplace as this ensures that the entity has followed and shall be required to follow specific compliances, making it more trustworthy than other entities. Moreover, suppliers, vendors or investors or other businesses can quickly obtain basic information about the company from the MCA website. This builds confidence in the brand name and enhances the goodwill of the company among entities looking to conduct business with it.
How to Choose an Idea Company Structure before applying for Company Registration in India?
Following are some important points every entrepreneur must know before applying for Company Registration in India:
Comparative List of Different Company Structures in India
Have a look at the following table that explicitly differentiates various business structures based on different parameters:
Company type | Recommended for | Tax benefits | Fundamental legalities |
Limited Liability Partnership (LLP) | Service-based businesses/businesses that don’t have significant investment needs | Benefit on depreciation | Business tax returns to be filed with Registrar of Company |
One Person Company, (OPC) | Sole owners aspiring to have business with utmost control | No taxes for first 3 years as per Start-up India initiative, Increased benefits on depreciation, Nil taxes on dividend distribution | Business returns to be filed, Limited ROC compliance |
Private Limited Company | Businesses with a high turnover | Tax holiday for first 3 years under Start-up India Higher benefits on depreciation | Business tax returns to be filed ROC returns to be filed An audit is mandatory |
Public Limited Company | Businesses with a high turnover | Tax exemptions under | Business tax returns to be filed. Mandatory Audits |
Requirements for Incorporating a Company in India
There are specific requirements which entities need to meet before they can be incorporated as a company, and they are as follows:
- Directors
To be incorporated as a company, it should have a minimum of two directors for a private limited company and a minimum of three directors when it is a public company. It is also required that at least one of the directors has been residing in India for at least a period of 182 days. There must be a minimum of 2 shareholders, while the maximum number of shareholders of a private company can extend up to 200, while there is no upper limit on the number of shareholders in a public company.
- Digital Signature Certificate or DSC Requirement
Shareholders, proposed directors, and other authorized signatories of a company are required to acquire a Digital Signature Certificate or DSC from a certification agency which has been approved by the Controller of Certification Agencies. DSCs are necessary to attest forms and duly submit them on the MCA website during the registration process. It is also imperative to have a valid DSC to apply for a Director Identification Number.
- Director Identification Number or DIN Requirement
Every proposed director of a company is required to have a Director Identification Number or DIN. The DIN can be applied for by filling out Form DIR-3 on the MCA website along with the SPICe+ Form. The Form is to be submitted with valid identity proof, and address proof of the director and the Form must be signed by a chartered accountant.
- Name of the Company
It is imperative to decide on a unique and distinct name for one’s company when applying for registration of the company on the MCA website.
Documents Required for Company Registration in India
Along with many regulatory and legal compliances involved, one needs to submit specific documents while applying for registration with the Registrar of Companies on the MCA website. The registrar scrutinizes the application along with the documents submitted and grants the certificate of incorporation once she is satisfied with the sufficiency of the submissions made. Some of the crucial documents to be submitted are as follows:
- Documents related to the proposed directors of the company
- PAN card and Aadhar card of the proposed directors.
- Address proof of the proposed directors like utility bills, Voter-ID cards, ration cards, driver’s licenses, passports.
- Identity proof of directors like driver’s license, voter ID.
- Contact details of the proposed directors along with their Email IDs.
- Passport-sized photographs of the proposed directors.
- Documents related to the company
- Proof of ownership of the office space, if any
- If the office space is on rented premises, then the lease deed.
- If the office space is on rented premises, then a No Objection Certificate from the landlord is needed.
- Address proof of the office space, like utility bills.
- Email ID of the company
- Draft Articles of Association or AOA and Draft Memorandum of Association or MOA of the company.
- Document showing the expected income of the company and the expenditure for the next three years with the source of income and the purpose of the spending.
Essential Forms to be filed for Incorporating a Company in India
The MCA website facilitates the online registration of companies by filing applications and uploading requisite documents on the website itself. Mentioned below are some of the critical forms which are necessary to be filed for the incorporation process:
- SPICe+ Form
This Form is segregated into two parts. SPICe+ Form Part-A is filed to reserve a unique name for the company. The applicants must provide alternative names in the Form for the registrar to choose the most appropriate name from. The applicants can also use the RUN or Reserve Unique Name feature available on the MCA website to check for the existence of similar or identical names in order to avoid using them.
SPICe+ Form Part-B is used to apply for incorporation of the company, Details pertaining to the capital structure of the company, and director details. Add details of subscribers, address of the office space, and information as to the jurisdiction for obtaining the TAN and PAN for the company. Mentioned below are certain documents which are to be attached to this Form:
- Identity proof and address proof of the proposed directors of the company and subscribers who have signed the memorandum of association.
- Passport-size photographs of the proposed directors of the company.
- The articles of association and the memorandum of association signed by the subscribers as provided under the Companies (Incorporation) Rules, 2014.
- Proof of ownership of the office space.
- If the office space is on rented premises, then the lease deed and a no objection certificate from the landlord.
- Utility bills for the office space.
- Details of the registered office space, if any or the office space being used till then.
- Declaration under Form INC-9 stating that the shareholders and the directors have committed no offence or malfeasance.
- Document showing the expected income of the company and the expenditure for the next three years with the source of income and the purpose of the spending.
- AGILE PRO Form
The AGILE PRO Form is filed for registration of Goods and Service Tax Identification Number, bank account opening, professional tax registration, and registration with the Employees’ State Insurance Corporation and the Employees’ Provident Fund Organization. Mentioned below are certain documents which are required to be attached along with this Form:
- Proof of the principal place of business.
- Identity proof of the authorized signatory for bank account opening.
- Address proof of the authorized signatory for bank account opening.
- For EPFO purposes, the signature of the authorized signatory.
- Copy of the resolution or a letter of authorization passed by the board of directors.
- Proof of appointment of the authorized signatory for Goods and Service Tax Identification Number.
- Form DIR 2
This Form is filed to intimate the consent of the proposed directors of the company to be appointed as the directors of the company.
- Form DIR 3
This Form is filed to obtain the unique director identification number for the proposed directors of the company.
- Form INC 22
The applicant shall file this Form to provide information pertaining to the registered office space of the company. This Form is required to be filed after the applicant receives the certificate of incorporation from the registrar within 30 days of such receipt.
Procedure for Company Registration in India
Following is the step-by-step procedure for Company Registration in India:
Step 1: Apply for a digital signature certificate
The proposed directors, shareholders and authorized signatories are required to apply for valid digital signature certificates from a certification agency approved by the Controller of Certification Agencies. Digital signature certificates are imperative 2A test forms on the MCA website during the Company registration process.
Step 2: Apply for a director identification number
Once the proposed directors have obtained their respective digital signature certificates, they are required to fill out Form DIR 3 and apply for the unique director identification number. The application has been approved by the registrar of companies, and she shall grant the distinctive DIN to the proposed directors.
Step 3: Company Name Search and Approval:
We can file SPICe+ Form for Company Name Approval and PAN & TAN of the Company in two different part as mentioned below:
- Select a unique company name and reserve it (Part A)
The next step is to fill out the SPICe+ Form Part A and reserve the company name.
The applicant has to click on the SPICe+ Form under the MCA services tab. One must select the company type, class of company, company category and sub-category of the company. The next step is to give details as to the ‘main division of industrial activity of the company’ The applicant is required to provide two alternative names from which the registrar of companies shall choose the most appropriate name. The forms shall be submitted along with documents as mentioned above and the prescribed fee.
- Duly Fill out SPICe+ Form (Part B)
Once the company name has been reserved, the next step is to file a new application under the SPICe+ Form Part B along with the requisite documents as mentioned above. The applicant is required to provide details pertaining to the proposed directors and shareholders of the company, information about the company’s registered office and resources of the company. One can also apply for PAN and TAN registrations at this stage. The applicant is required to conduct a pre-scrutiny check to review the correctness of the information filed under Part B. After the scrutiny check, and the Form can be submitted.
The next step is to download the Part B of the Form to affix the DSCs of the directors or the authorized signatories. There are certain forms which are to be filed along with the SPICe+ Part B form. The forms which are linked to the SPICe+ Form Part are AGILE PRO, SPICe+ MOA, SPICe+ AOA, URC-1 and INC-9. The applicant must ensure that SPICe+ AOA and SPICe+ MOA forms are filled as per the instructions provided under Schedule 1.
The next step is to upload all the forms on the MCA portal.
Step 4: Assessment by the Registrar
All the submissions made shall be scrutinized add assessed by the registrar of companies. If there a star finds any lacuna or error in the application or the documents, it shall give the applicant an opportunity to rectify the error and resubmit the forms again, as stated above.
Step 5: Issuance of Certificate of incorporation
After the registrar has reviewed the application along with the details and the documents submitted by the applicant and the registrar is satisfied with the accuracy and completeness of the application, she shall grant the certificate of incorporation to the company. A unique Corporate Identification Number or CIN shall be generated along with the certificate, and this shall be valid proof of the registration of the company.
Post Incorporation Compliance for Private Limited Company
Once a company is incorporated in India, it should maintain a number of compliances to avoid any penalties and legal actions. After Company Registration, a Company would need to comply with the following requirements:
- DIN KYC: Every year, DIN KYC is required who holds a Director Identification Number, which is given at the time of Company Registration Process and verifies the email address & phone number on file with the MCA.
- Commencement of Business: The Company’s Shareholders must deposit the subscription amount cited in the MOA within 180 days of Company Registration, and the company must create a bank current account. Therefore, in order to receive a Company Registration Certificate, the Company’s Shareholders that is to be established with a paid-up capital of Rs. 1 lakh must deposit Rs. 1 lakh into the bank account of the company and file a copy of bank statement with the MCA.
- Filing of Income Tax: Each Financial year, all businesses are required to submit an ITR using Form ITR-6. ITR filing must be completed for each financial year before the deadline. A DSC of a Director must be used to digitally sign the Company’s Income Tax Return.
- Appointment of the Auditor: Within 30 day of Company Incorporation, every in Company in India must appoint a precising, registered & certified CA.
- Annual Filings: Every Financial Year, the Ministry of Corporate Affairs must get a copy of the Financial Statements from each Company that is incorporated in India. A Company that registered between Jan & Mar may elect to include the 1sdt MCA Annual Return in the Annual Filing for the following Financial Year. Form AOC-4 and Form MGT-7 are the components of the MCA annually return. The Directors and a working professionals must digitally sign both of these documents.
Note: For more information regarding MCA Compliances to be followed by the Company, read on MCA Compliance.
How Dreamunicus will help you in Company Registration Process?
The process of Company Registration involves adhering to many requirements, preparing documents, and complying with pre-incorporation and post-incorporation compliances. Moreover, complying with specific MCA mandates is imperative to avoid incurring hefty penalties and late fees. This process can seem daunting and confusing without professional assistance. Dreamunicus provides expert service in the online Company registration process on the MCA website. Our team of experts will assist you every step of the way in your journey to get your company registered.
With Dreamunicus, you can establish your Company in minimal time. Our Company Company Registration package includes:
Frequently Asked Questions (Faq)
- Preservation of your company's name and brand.
- Capability to bring a lawsuit or be sued in court.
- Access to government contracts.
- Capability to take advantage of tax incentives.
- Simplified operations by having a single point of contact with the government.
You may select any of the following options for your company registration in India:
- Sole-proprietorship
- One Person Company (OPC)
- Public Limited Company
- Partnership Firm
- Limited Liability Partnership (LLP)
- Private Limited Company (PLC)
You require your company name, a regional registered location, a resident directory, shareholders, and paid-up capital to create a company in India.
The steps listed below can be used to register your company in India:
- Apply for name approval
- get a DSC and DIN
- get your certificate of incorporation, and
- Submit applications for GST, TAN, and PAN numbers.
Any company that becomes established starting on February 23, 2020, must submit an application for name and incorporation reservation via the web tool SPICe+. In Part A of SPICe+, company names may be reserved.3 If the applicant wishes to submit a single application for a name, incorporation, and other integrated services, he may do so by completing Parts A and B with the appropriate information. The web service RUN (Reserve Unique Name) must be submitted in order to alter a name.
The RUN service is a straightforward and simple-to-use web tool for reserving a name for any existing company to change its name. The said service no longer requires name reservations to be made using a Digital Signature Certificate (DSC). It was another value addition to the Ease of Doing Business in India.
Already registered users must log into their accounts using their credentials in order to access the SPICe+ Web form, which is a post-login service. Before using the service, new users must first register a login account.
An application for name reservation or incorporation that has not yet been filed or uploaded by the user is assigned an application number that is created by the system.
A fairly easy online method is required to register a company as a startup company under the Startup India initiative. You must perform the following steps in order to do that.
- Registering the business: You must first register the business as a Limited Liability Partnership, a Private Limited Company, or a partnership firm.
- Sign up with Startup India: Next, the company needs to sign up as a startup. Everything is straightforward and done online. All you have to do is sign into the Startup India website, fill out the form with information about your company, and submit a few files.
Obtaining the Company's name requires just two simple steps: Application to the Concerned ROC, and selection of an appropriate name.
You need the following documents to register your Company.
- Directors & Shareholders Documents
- Passport-size photograph
- PAN Card copy (mandatory)
- Address Proof (Any one of the below) 1. Passport 2. Aadhar Card 3. Driving License 4. Voter ID
- Residential Proof (Any one of the below) 1. Bank Statement 2. Electricity Bill 3. Telephone Bill 4. Mobile Bill
- Registered Office Address Proof Documents
- Office Property Ownership/Rental documents
- Address Proof of Registered Office Premises Once you have these documents, you are ready to roll your sleeves and get ready to be incorporated.
Whereas AOA stands for Articles of Association, MOA stands for Memorandum of Association. Both of these documents serve as crucial informational resources for various shareholders and other company stakeholders.
Digital Signature Certificate is referred to as DSC. The digital equivalent of physical documents or certificates is known as DSC. It is needed to file the form electronically with the appropriate department. DSC for one of the Directors is necessary for a private business's company registration.
The Ministry of Corporate Affairs, Government of India, issues a Director or prospective Director of a Company with a number called a DIN, or Directors Identification Number. When Sections 266A and 266G were added to the Companies Act, the notion of DIN was first introduced. One must submit the necessary identity and address proof documents along with an online application to the Ministry of Corporate Affairs in order to obtain a DIN. The person will receive the DIN after the Ministry has verified these papers.
The DPIN (Designated Partner Identification Number) used for identifying a designated partner in a Limited Liability Partnership (LLP) firm, is equivalent to the DIN (Director Identification Number) of a director7 of a private or public limited company. The Indian government's Ministry of Corporate Affairs (MCA) is responsible for issuing both of these identification numbers.
Following the below-given steps, you can check the status of the company registration.
Step 1: Go to the MCA website.
Step 2: Go to the ‘MCA Services' tab. Then ‘View Company/LLP Master Data.
Step 3: Enter the company’s CIN. Enter the captcha code. Click on ‘Submit’.
Now you will be able to view the exact status of your registration process.
Absolutely, the entire procedure of registering a company in India is done online. The Central Registration Centre (CRC), a dedicated back office for the Company and LLP Registration process, processes papers filed electronically through the MCA website for company registration and other regulatory filings.
Yes, A Listed Company or a Company with More Than 1000 Shareholders Should Maintain Records in Electronic Format, according to Rule 27 of the Companies (Management & Administration) Regulations 2014. Nonetheless, throughout their existence, all other Companies must keep statutory documents in the form of registers, minutes, etc.
The following are a few circumstances in which a name falling into one of the categories listed below will often not be made available, per the MCA Guidelines on Company:
- It is inconsistent with the main goals of the business, as stated in its memorandum of association. This does not imply that all names must be descriptive of their subjects. Yet, if the name contains any hint of a business, it ought to be in line with its goals.
- The primary business of the company is finance unless the name specifically refers to one or more specific financial operations, such as investments, loans, etc.
- It contains any word which is unpleasant to any segment of people.
- The proposed name is exactly a Hindi translation of the name of an existing company in English, notably an existing company with a reputation.
- The proposed name is phonetically similar to the existing company's name.
- It contains words like "co-operative" or words corresponding to this phrase in the regional languages of the nation; the name is simply generic, such as Cotton Textile Mills Ltd. or Silk Manufacturing Ltd., rather than specific, such as Calcutta Cotton Textiles Mills Ltd.
After the registrar has examined all the paperwork and made the required modifications to the MOA and AOA, a Certificate of Incorporation is a document that officially recognizes the existence of the companies. Both Public Limited Companies and Private Limited Companies receive Certificates of Incorporation. A public company with a share capital cannot start doing business until it has received a Certificate of Commencement, which is issued after receiving a Certificate of Incorporation. Private companies, however, are exempt from this requirement and may start operating as soon as they receive their Certificate of Formation.
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