Private Limited Company

Overview of Private Limited Company

A private limited company is an ideal business structure for startup founders and business owners seeking limited liability and operational flexibility. Designed for a small group of shareholders, this entity can accommodate up to 200 members, offering dynamic options in shares and shareholdings.

Jordensky: Your Trusted Partner for Pvt Ltd Company Registration.

At Jordensky, we simplify the Private Limited Company registration process, making it cost-effective and hassle-free. Our expert legal team ensures complete compliance with the Ministry of Corporate Affairs (MCA) regulations. 

Here’s what you can expect

• Comprehensive Legal Assistance: We manage all legal formalities and documentation.‍
• Incorporation Certificate (CoI): Upon successful registration, we provide you with an Incorporation Certificate.‍
• PAN and TAN Documents: Essential for opening a current bank account and starting business operations.

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How to Register Private Limited Company

Private Limited Company Registration Process with SPICe+

The Ministry of Corporate Affairs (MCA) has introduced the Simplified Proforma for Incorporating Company Electronically Plus (SPICe+), an integrated web form that offers multiple government services in one place. The SPICe+ form is divided into two parts: Part A and Part B.

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Step 1: Obtain a Digital Signature Certificate (DSC)

What is a DSC?‍

A Digital Signature Certificate (DSC) is a secure digital key used to verify and sign documents electronically.

Validity

DSCs typically come with a validity of one or two years and are mandatory for all witnesses in the Memorandum of Association (MOA) and Articles of Association (AOA).

How to Get a DSC

You can obtain a Class 2 or Class 3 DSC from any government-listed Certifying Authorities (CAs).

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Step 2: Apply for Name Approval Using SPICe+ Part A

Name Reservation

‍Part A of the SPICe+ form allows you to reserve a company name, providing two proposed names and one chance for re-submission if the initial names are rejected.

Rejection of Name

‍If your proposed name is rejected due to a similarity with existing companies, LLPs, trademarks, or non-compliance with MCA guidelines, you must re-file the SPICe+ form with the appropriate fee.

‍Simultaneous Filing

‍You can apply for both name approval (Part A) and incorporation (Part B) simultaneously. However, when filing together, you can only reserve one name.

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Step 3: Apply for Company Registration Using SPICe+ Part B

Once your company name is approved, proceed with Part B of the SPICe+ form to complete the registration process. Part B covers several critical steps.

1. DIN Application

Apply for the Director Identification Number (DIN).

2. Company Incorporation

Complete the incorporation process for your new company.

3. Submit e-MoA and e-AoA

Submit the electronic Memorandum of Association (e-MoA) and electronic Articles of Association (e-AoA).

4. PAN and TAN Applications

Apply for the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).

5. Mandatory Registrations

Employee Provident Fund Organization (EPFO) registration and Employees' State Insurance Corporation (ESIC) registration.

6. Professional Tax Registration

Required only for companies in Maharashtra.

The data entered in SPICe+ Parts A and B is automatically populated into related forms such as AGILE-PRO, eAoA, eMoA, URC1, and INC-9 as applicable.

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Step 4: Open a Bank Account

Set up a current account for your company to facilitate seamless financial transactions, such as receiving payments from clients, paying suppliers, and managing payroll.

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Step 5: File for the Commencement of Business Certificate

File Form INC-20A with the Registrar of Companies to declare the commencement of business. This must be done within 180 days of incorporation.

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By following these steps, you can efficiently register your Private Limited Company using the SPICe+ system and start your business operations with ease.

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Documents required of Private Limited Company

Identity Proof

• Passport
• Driver's License‍

‍Address Proof

• Utility Bills (such as electricity or water bills)
• Bank Statements

Proof of Registered Office

• Ownership of Property: A recent utility bill (electricity bill or corporation tax receipt) dated within the last 30 days.
• Right to Use the Property: Rental Agreement or No Objection Certificate (NOC) from the property owner.

Memorandum of Association (MOA) and Articles of Association (AOA)

1. Memorandum of Association (MOA)

Defines the company's objectives and scope of activities.

2. Articles of Association (AOA)

Outlines the company's internal regulations and governance structures.

3. Declaration and Consent of the Proposed Directors

• Form INC-9: Serves as the official declaration by the proposed directors.
• Form DIR-2: Provides consent from the proposed directors to assume their roles.

These documents are essential for the smooth registration and legal compliance of your Private Limited Company.

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Advantages of Private Limited Company‍

1. No Minimum Capital Requirement

A Private Limited Company can be registered with as little as Rs. 10,000 as total Authorized Share capital, eliminating the need for a minimum capital investment.

2. Separate Legal Entity

Pvt Ltd. Enjoy the benefits of a separate legal identity in the eyes of the law, ensuring that the assets and liabilities of the company remain distinct from those of its directors.

3. Limited Liability Protection

It protects personal assets from company debts; members are liable only up to the extent of their shareholding, ensuring that personal assets are not at risk in case of financial distress.

4. Fundraising Opportunities

Access funding from Venture Capitalists (VC) or Angel investors, providing opportunities for growth and expansion beyond initial capital.

5. Easy Transfer of Shares

It Facilitate seamless transfer of shares through simple procedures, allowing shareholders to transfer their ownership interests without complications.

6. Perpetual Succession

Private Limited acts as a separate legal entity, irrespective of changes in membership, ensuring continuity of operations and business relationships.

7. Foreign Direct Investment (FDI)

Open doors to 100% Foreign Direct Investment, enabling foreign entities or individuals to invest directly in the company in India and contribute to its growth.

8. Enhanced Credibility

Listing company details on public databases enhances credibility and facilitates authentication, fostering trust among stakeholders and potential partners.

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Disadvantage of Private Limited Company

1. Restrictions on transfer of Shares

Share transferability is limited by the company's articles, potentially hindering liquidity and investment opportunities for shareholders.

2. Shareholder Limitation

The number of shareholders in a Private Limited Company cannot exceed 50, limiting the potential for broad ownership and investment diversification.

3. Inability to Issue Prospectus

Private Limited Companies are prohibited from issuing prospectuses to the public, limiting their ability to raise funds through public offerings.

4. Exclusion from Stock Exchange

Private Limited Company shares cannot be quoted on stock exchanges, restricting opportunities for liquidity and market exposure for shareholders.

Despite these limitations, the advantages of a Private Limited Company often outweigh the disadvantages, making it an attractive business structure for business owners seeking limited liability, flexibility, and growth opportunities.

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Various Types of Private Limited Companies

1. Company Limited by Shares

In a company limited by shares, the liability of members is restricted to the nominal share amount specified in the Memorandum of Association. Shareholders are not personally liable for amounts exceeding their capital investment in the company.

2. Company Limited by Guarantee

A private limited company limited by guarantee limits the liability of its members to the predetermined guarantee amount stated in the Memorandum of Association. Members' liability is confined to the guarantee amount specified, ensuring they are not liable for amounts beyond this guarantee.

3. Unlimited Companies

Unlimited companies are entities where members have unrestricted liability for the company's debts and obligations. Each member is personally liable without limitation.

Understanding the distinctions between these types of Private Limited Companies is essential for selecting the most suitable structure based on liability preferences and business objectives.

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Checklist for Incorporation of Private Limited Company Registration

• Digital Signature Certificate (DSC) - Obtain DSC for all designated directors.
• Draft Memorandum of Association (MoA) & Articles of Association (AoA) - Prepare e-MoA and e-AoA documents outlining company objectives and internal regulations.
• Company Name Approval - Choose a unique and compliant name for your company and secure approval.
• Apply via SPICe+ - Complete the registration process using the SPICe+ integrated web form.
• Document Submission & Fee Payment - Submit required documents and pay applicable fees as per regulatory guidelines.
• Certificate of Incorporation - Upon successful review, receive the Certificate of Incorporation from the authorities.
• PAN & TAN - Obtain Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for tax purposes.
• Company Bank Account & Registered Office Proof - Open a company bank account and provide proof of the registered office address.
• Compliance Management - Stay updated with ongoing compliance requirements to ensure legal adherence.
• Two Directors:A Private Limited Company must appoint a minimum of two directors, with a maximum limit of fifteen directors. At least one director must be a resident of India
• Unique Name:The chosen name for your Private Limited Company must be distinctive and not identical or similar to existing company names or trademarks in India.
• Minimum Capital Contribution - There is no mandatory minimum capital requirement for a Private Limited Company. However, it is recommended to have an authorized capital of at least ₹1 lakh

Following this checklist will help streamline the Private Limited Company registration process, ensuring efficient and compliant establishment of your business entity.

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Cost of Registration

Includes

• Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) for 2 directors
• Incorporation Certificate
• Memorandum of Association (MoA)
• Articles of Association (AoA)
• PAN and TAN‍

‍Additional Fees

• Extra fees may apply for additional directors or authorized capital.
• Customized Estimate
• For an exact estimate tailored to your requirements and jurisdiction, please contact us at jordensky.com

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