How is a private limited company registered?

With every key process in a business being done online, it would be insignificant if the registration could not be done online. It requires that every possible business transaction be done electronically, notonly because it is contactless, but also because it is far easier and faster. Private Limited Liability Company Registration is no exception to this rule and can be completed online by following the instructions. After deciding on a Private Limited Company as the legal entity for the business, the next step is to begin the registration process. When it comes to selecting a business entity, there is no right or wrong answer. It all depends on the business's needs and tax filing requirements. Having the company registered ensures that the business runs smoothly and efficiently. So you can hire a legal advisor from legalraasta to help you with the Private Limited Company Registration Process. In this blog, we will explain how a private limited company is registered, as well as the guidelines and requirements for registering a private limited company.

Private Limited Company Registration Benefits

Ø  A private limited company must have at least two shareholders and no more than 200 members. Because the company is a separate and distinct legal entity, the shareholders are not personally liable in cases of company liabilities. A company must have at least two directors and a maximum of 15 directors in order to be registered under the Companies Act of 2013. The most significant advantage of a private limited company is that there is no requirement for a minimum share capital in order to register it.

Ø  The private limited company, which is many businesses' first choice, has a step-by-step registration process. With a few legal documents prepared, the registration could be completed quickly. The registration would ensure that the company is legally recognised and would increase the credibility of the clients.

Ø  Many start-ups and businesses choose private limited companies as their corporate entity of choice to carry out their business activities. Private Limited Companies are governed by the Companies Act of 2013, which is administered by the Ministry of Corporate Affairs (MCA). A private limited company is a separate legal entity from its owners and thus has a clear demarcation. A Private Limited Company Registration can enter into contracts and own assets because it has a strong legal personality. On the other hand, the company's shareholders have limited liability that is proportional to the number of shares they own.

Requirements for Private Company Registration in India

Ø  Members: A Private Limited company must have a minimum of two members and a maximum of 200 members. The Directors must have a Director Identification Number (DIN), as directed by the MCA.

Ø  Company Name: The Company should have a proper name with the words "Private Limited Company" appended at the end for private limited company registration. After deciding on a name for the company, it must be submitted to the RoC for approval. It must be remembered that the company's name should not be similar to or resemble the name of any other company.

Ø  AOA and MOA: The Articles of Association and the Memorandum of Association must be finalized.

Ø  Registered Office: After completing the private limited company registration process, the registered office address must be reported to the RoC.

What is the minimum share capital for the formation of a private limited company?

Many people get the minimum share capital and investment options mixed up. For example, if you want to start a business, you must secure a minimum investment from your promoters. This will clearly establish your business capacity. The sum is referred to as the minimum share capital. Investment options, on the other hand, will include investors who want to contribute to your company in order to increase profits in the long run.

Types of Capital in Startup Businesses for Private Limited Company Registration

Ø  Authorized Capital: The authorized capital of a company is mentioned in the company's Memorandum of Association and also in the Capital Clause. This is also where you will find information about your company's Authorized Capital. The company cannot achieve success if capital investments exceed the authorized share capital limit during its lifetime.

Ø  Subscribed Capital: Subscribed Capital is the portion of a company's capital issued by various investors. It is the portion of the capital that the shareholders have agreed to contribute all at once. As a result, the investors or shareholders are only obligated to pay the unpaid amount of the Subscribed Capital that the company owns.

Ø  Paid-up Capital: Paid-up capital is the actual amount of capital that a company can demand from its shareholders in order to maximize profits. Investors unanimously agree to pay this amount, which is typically less than the total liability of the company members.

Private Limited Company Registration Documents

Ø  It is critical that the business owner has all of the necessary legal documents on hand.

Ø  A Digital Signature Certificate (DSC) is essential for verifying the legality of the documents.

Ø  The directors must provide ID proofs such as a PAN card or a valid passport.

Ø  Aadhar cards or ration cards are required as proof of address.

Ø  Proof of residence must be provided in the form of bank statements, electricity bills, or telephone bills.

Ø  If the company is in a rented space, the rental agreement must be furnished, as well as a letter of authorization from the owner.

Ø  If the company is established on its own property, a copy of the sale deed must be submitted.

Private Limited Companies Registration Process

Step 1: Submit an application for the reservation of the Company's name via Spice PART. A form through the MCA portal.

Step 2: Selecting an appropriate name for the Private Limited Company.

Step 3: The MCA will either approve or reject application within 3-4 days.

Step 4: If the name is approved, the MCA will send us a name permission letter, and we must register the company within 20 days.

Step 5: To get the DSC of the company's directors which will aid in the authentication of documents uploaded online.

Step 6: Using SPICE PART B, electronically draught the company's MOA and AOA.

Step 7: Submitting an online application to form a Private Limited Company.

Step 8: A Certificate of Incorporation, PAN, and TAN will be issued by the department upon the formation of a company.

Conclusion

The first and most important step in forming a private company is to register it in India. Only after registration does the company have a solid and legal business structure. This blog has explained what a private limited company is. What is the Private Limited Registration Process and how does it work? If you have any questions or need assistance with forming a private limited company, you can Contact Legalraasta. Registering the company ensures that the business runs smoothly and avoids any potential legal issues in the future. Registering the company would also elevate the company in the eyes of potential customers, giving the company more credibility. The process of incorporating a company may appear time-consuming, but it is a one-time task that, if completed flawlessly, will result in a well-organized and wholesome company.