Private Limited Company should be the preferred choice of business
if you are planning to raise funding. It is a privately held business entity
with limited liabilities. It allows a significant degree of separation between
operations and ownership. It gives investors a choice of exiting the company
without any hassle by just selling the shares without being liable for company
affairs. If a business is planning to go global, then the Private Limited Company is the only form which allows 100% Foreign
Direct Investment, without any prior government approval.
To set up a private limited company one needs to :
1) Choose a name:The name of the company is its trade name
or brand name along with its principal activities, and this company name is a
registered name by which an incorporated company is identified. It is critical
that one chooses a unique name which does not resemble the name of any existing
LLP, any registered private company or trademarks.
2)Have a company address:‘Company Address’ is the address of the
Registered Office of the proposed company which is used for all official
communications. A temporary address is required, at the time of registration,
which could be the address of any of the including Directors. Post registration
process applicant has to provide the permanent business address of the
registered office with all the documentary proofs of address, ownership.
3)Appoint alteast 2 direcrtors:Minimum 2 Directors are required to manage
the affairs of the company who can be same as shareholders. At least one of the
directors has to be a Resident of India. To be a Director of a private limited company, one must
have a DIN.
4)Apply for DIN & DSC for each
director:DIN is an eight
digit number allotted to every director. No person can become a director without
first applying for DIN. It is a unique identification number for an existing
director or a person intending to become one, and it is allotted by the
Ministry of Corporate Affairs (MCA). Digital Signature Certificate (DSC) is a
digital signature which can be attached to an electronic document to verify the
applicant’s identity.
5)Have lateast two shareholder:Minimum 2 shareholders are required in a
company limited by shares. They can be Natural or Artificial Persons such as
registered companies or LLP. A shareholder can be same as the director of the
company. Maximum of 200 shareholders are allowed, shareholders are the owners
of the company, and they have certain rights as shareholders need to vote for
appointing directors and agree on changes to the company.
6)Draft Memorandum of association &
article of association:Memorandum
of Association (MOA) MOA is a document which contains the objective and power
of the company and defines the relationship of the shareholders with the
company. It must be drafted at the time of incorporation and must contain six
clauses revealing the company name, registered company address, its limited
liabilities, share capital, company objects, and association of the
shareholders and other stakeholders with the company.
Articles of Association (AOA)
AOA are the
by-laws of the company which specifies the regulations for a company’s
operation. It defines the roles and duties of the directors and other officers
of the company. Information such as the total number of members, share capital,
rules for a meeting of the company, voting power of members must be included in
the AOA. The company may alter it by passing the resolution at a general body
meeting of shareholders. Also, AOA may or may not be registered.
7)File INC29 to register private limited
with MCA:INC 29 is the
single integrated form issued by the ministry of corporate affairs for the
incorporation of the company. INC-29 is a single window to get Director
Identification Number (DIN), Name Approval and Incorporation application
process. It’s a fast track mode to get the company incorporated in the
expedited manner.
8)Obtaion certificate of incorporation from
ROC:Certificate of
Incorporation is a certificate issued by the Ministry of corporate
affairs/Registrar of companies for the commencement of business; it is a
confirmation of and conclusive evidence of incorporation of a company.
Documents Required For Registering A
Private Limited Company
1)
All directors and shareholders need to provide Self-attested copy of PAN Card ID
Proof (Aadhar card/ Voter ID/ Driving license).
2) Address Proof in the name of director (Any utility bill i.e., mobile bill/water bill/ electricity bill, or bank statement which should not be older than two months).
3) 4 Passport Size Photographs.
4) Address proof of Registered office.
5) Any utility Bill (i.e., mobile bill/water bill/ electricity bill) of the registered office.
2) Address Proof in the name of director (Any utility bill i.e., mobile bill/water bill/ electricity bill, or bank statement which should not be older than two months).
3) 4 Passport Size Photographs.
4) Address proof of Registered office.
5) Any utility Bill (i.e., mobile bill/water bill/ electricity bill) of the registered office.
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