Incorporating Private Limited Company (Pvt Ltd) in India is a popular choice among entrepreneurs due to its distinct advantages such as limited liability, separate legal entity status, and ease of raising capital. This blog post provides a step-by-step guide to help you understand the process and benefits of incorporating a Private Limited Company in India.

Private Limited Company

Why Choose a Private Limited Company?

•          Limited Liability: Shareholders' liabilities are limited to their shareholdings. Personal assets are protected.
•          Separate Legal Entity: The company is a distinct legal entity separate from its shareholders.
•          Ease of Raising Funds: Can raise capital by issuing shares, making it easier to secure investments.
•          Perpetual Succession: The company's existence is not affected by changes in ownership or shareholders.
•          Enhanced Credibility: A Pvt Ltd company enjoys higher credibility compared to other business structures.

Pre-Incorporation Requirements

Before you start the incorporation process, ensure you have the following:

•          Minimum Shareholders: At least 2 shareholders.
•          Minimum Directors: At least 2 directors, with at least one being an Indian resident.
•      Unique Name: A unique name for the company that complies with naming guidelines.
•          Registered Office Address: An official address for company correspondence.

Post-Incorporation Compliances

After incorporation, ensure you comply with the following:

•        PAN and TAN: Apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the company.
•          Open a Bank Account: Open a corporate bank account in the company's name.
•          GST Registration: Register for Goods and Services Tax (GST) if applicable.

•       Compliance Filings: Maintain statutory registers, hold regular board meetings, and file annual returns with the Registrar of Companies (RoC).

Steps to Incorporate a Pvt Ltd Company in India

Steps to Incorporate a Private Limited Company in India :

•          Obtain Digital Signature Certificate (DSC) :

          Digital Signature Certificates are required for signing electronic documents. Apply through certifying authorities such as eMudhra or Sify.

 

•          Obtain Director Identification Number (DIN) :

           Directors must have a DIN, which can be obtained by filing Form DIR-3 on the Ministry of Corporate Affairs (MCA) portal along with identity proof and address proof.

 

•          Name Approval :

          Propose a unique company name and check its availability on the MCA portal. File Form SPICe+ (Part A) to reserve the name.

 

•          Drafting of Memorandum and Articles of Association (MOA and AOA) :

           The MOA and AOA are the constitutional documents of the company. They outline the scope of activities, objectives, and internal rules. Draft these documents and ensure they are signed by all subscribers.

 

•          Filing Forms for Incorporation :

          File the SPICe+ (Simplified Proforma for Incorporating a Company Electronically Plus) form along with the following attachments:

·         MOA and AOA

·         Declaration by Directors (Form INC-9)

·         Proof of identity and address of directors

·         Proof of registered office address

 

•          Payment of Fees and Stamp Duty :

            Pay the requisite fees and stamp duty online based on the authorized capital and state of incorporation.

 

•          Certificate of Incorporation :

            Once the MCA verifies your documents, they will issue the Certificate of Incorporation (COI). The COI includes the Company Identification Number (CIN), which is a unique identifier for your company.

 

Conclusion :

Incorporating a Private Limited Company in India offers many advantages for startups and growing businesses. Follow the steps to ensure a smooth process and legal compliance, and consult an expert for informed decisions. This structure provides a solid foundation for growth and instills confidence in stakeholders. Take the leap and formalize your business with a Pvt Ltd company.