Private Limited Company Registration In India




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For those of you who are serious about having more, doing more, giving more and being more, success is achievable with some.

Private Limited Company Registration In India




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For those of you who are serious about having more, doing more, giving more and being more, success is achievable with some.

What is a Private Limited Company?

In India a Private Limited company (PLC) is one of the most common entities. for a Private limited company in India there must be 2 directors and 2 shareholders required with one being an Indian according to companies Act 2013. 

The following are the minimum requirement to register a company.

  • 2 Directors- 1 persons should be an Indian national and Indian resident.
  • 2 Directors-The directors can be shareholders.
  • Registered office in India

Most foreign subsidiaries are established in India as private limited company and
also as there is no restriction on foreign shareholding of a private limited company as
foreign direct ownership is 100% is permitted in India.

Documents required for Company Registration

In order to register a company, the directors required following documents as a proof

Indian Nationals: PAN card mandatory

Foreign Nationals: Passport mandatory

The address of the director is equally important so director should also submit following:

Indian Nationals: Passport/ Driver’s License/ election ID/Ration card /Aadhar card

Foreign Nationals: Driver’s license/ Bank Statement/ Residence card

The directors must also submit one of the following documents. This document must be from last two months.

Indian Nationals: Bank Statement/Electricity Bill /Phone Bill

Foreign Nationals: Bank Statement/Electricity Bill /Phone Bill

If one of the shareholders company is Based in India or abroad then following documents are required

  • Board resolution authorizing investment in the company
  • Incorporate Certification of the company
  • Address proof of the company

Capital required to start a company

In India a company start-up requires very few capitals. There is no fix capital and the shareholders can invest as per their determination. While setting capital structure following points should be kept in mind:

Face value of share: the face value per share is the price per share with which the company is indulge. Normally the face value of share is Rs. 1 or Rs. 10 or Rs. 100 or
Rs. 1000 or Rs. 10000.

Authorised capital: A total value of shares which a company issue to shareholders is called authorised authorised capital of 1 lakh or 10lakhs is normally indulged. The company would pay additional fees to ministry of corporate affairs if higher capital is required. After incorporation the authorized capital of a company can
be increased.

Paid-up Capital: the number of shares issued to shareholders for which they have paid to the company is called paid-up capital. The authorized share capital of the company is equivalent to paid-up capital of the company.

Company Registration Process

The following are the steps involved in registering a company in India

Step 1: Run Name Approval

To reserve the company name first the application needs to be submitted to the Ministry of Corporate Affairs for the name approval.1 or 2 names with business objective can be submitted for the name approval application.1 or 2 more names can be re submitted if the approval is rejected. The approval id approved within less than 5 working days by MCA.

Step 2: Digital Signature for Directors

Only digital signature is allowed for filings with MCA that is issued by the Certification Authority in India, ministry if India don’t allow wet signatures. Digital signatures are
mandatory before incorporation. obtaining digital signature directors need to submit their identity proofs and complete a KYC process. And it is obtained through the Authorised Certifying Authority by India Filings. The passport needs to be submitted if the director is Foreign national and that document must be apostilled by a local embassy.

Step 3: Incorporation Application Submission

The incorporation application can be filed in SPICe Form to the MCA with all relevant attachments when the digital signatures are acquired. after incorporation application the Memorandum of Association (MOA) and Articles of Association of the company are filed.

If the MCA finds it acceptable the incorporation certificate is granted along with company PAN. This is done in less than 5 working days.

Private Limited Company Compliances

Once a company is registered in India you have to obey the order time to time to avoid penalties and prosecution. The following are some compliances:

Auditor appointment: within 30 days of start-up or incorporation in India the company must appoint a Charted Accountant who must be in practice and licensed
and registered with ICAI.

Director DIN KYC: the person who holds a Director Identification Number (DIN) which has been allocated to him during incorporation process must complete DIN KYC each year. This need to be done to validate the phone number and email address.

Commencement of Business: the company must open a current bank account after 180 days of incorporation and all shareholders need to deposit subscription amount mentioned in MOA of company. Hence, if the company is incorporated with capital of 1 lakh each shareholder must deposit 1 lakh in companies bank account and obtain a commencement of business certificate with MCA

MCA Annual Filings: All companies registered in India each financial year must file a copy of financial statement with Ministery of Corporate Affairs. If the company is incorporate in the financial year from January – march the company as a part of the next financial year can choose to file first MCA annual return. The form –MGT-7 and Form AOC-4 are there in MCA. These forms must be signed by the Directors and practicing professional digitally.

Income Tax Filing: ITR-6 is the form which should be filled by all companies each financial year for income tax return. It should be completed before the due date irrespective of the incorporation date. Digital signature must be used to signed the income tax return from either of the Directors of the company.

Registered Office of Company

All companies should have Registered office who have registered in India. Registered company must have board with the company name and should be placed where notice can be written. The registration company must have an office or a valid address and not a under construction land or premises.

After incorporation the company can change their office. If the office is shifted in same city or same registrar the process can be easily completed. But if it is shifted to other state then the process is lengthier.

GST Registration After Company Registration

Unless certain Turnover limits are crossed it is not mandatory for the company to register for GST. Along with the incorporation company can opt for GST Registration. You can gain knowledge of GST registration in India through detailed guide on GST.

Bank Account for Private Limited Company

After company registration a current account of band is mandatory after 180 days and subscription amount must be deposited. If this is not done or completed then a
penalty is applicable to the company and business commencement certificate is not issued.

The following are the documents required to open a bank account for private limited company:

  • Incorporation Certificate of Company
  • Director’s KYC documents
  • Board resolution Authorizing the Directors to open Bank Account
  • Address Proof of a Company

We help our clients to open a current bank account for their companies easily at India filings.

Private Limited Company FAQ’S

1.What is authorized capital and paid-up capital?

Authorized capital is the maximum value of equity shares issued by a company. On the other hand, paid-up capital is the number of shares issued by the company to
shareholders. Authorized capital can be increased anytime.

2.What is Limited liability protection?

The status of Legally responsible for a limited amount of debts of a company is limited liability. The liability of a shareholder is limited as compared to proprietorships
and partnerships.

3.How do I open a current account?

A Current account need to be open by a company name after incorporation of a company. You need to hire an advisor who will guide you through which account to be opened to get a certificate of incorporation and in which bank and submit the documents like memorandum and Articles of Association board Resolution. Copy of PAN allotment letter and utility bill.

4. Can NRIs or foreign national or foreign entities register a company in India?

Yes, NRI’S can register and invest in India as per RBI rules but one Indian national is mandatory be a part of company on the board of directors.

5. How do I check the availability of names for my company?

You can use India Filings name availability search tab to search for available names. It will provide you only suggestions or choices based on identical name already registered.

6. Is GST registration mandatory at this stage?

A company with turnover more than 40 lakhs and a company dealing with Ecommerce operations required GST Registration. It just takes 3-5 working days with India Fillings.

7. What are the compliances of a Private Limited Company?

Ia company is registered then they need to maintain certain compliances. Company needs to appoint an auditor in 30 days. income tax and return filing to be done every year. DIN eKYC also needs to be done and commencement of business forms also needs to be done

8. When is the statutory auditor to be appointed?

Within 30 days of incorporating a PVT LTD company, the Board of Directors is required to appoint a practicing Charted Accountant.

9. Which Form is to be filed for the ITR filing of Private Limited Company?

ITR 6 is the form to be filed every year.

10. Which form is to be filed for filing the annual returns of a Company?

MCA annual return each year informs AOC4 and MGT 7 every year.