Private Limited Company
A Private Limited Company offers limited risk and legal protection to its investors. A Private Limited Company in India lies somewhere between a partnership firm and a broadly owned public company. It can be registered with a minimum of two individuals. A person can be both a director and investor in a Private Limited Company.
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Private Limited Company Registration
The liability of the members from a Private Limited Company (PLC) is restricted to the number of shares held by them. A private Limited organization in India can start with operations after getting the Certificate of Incorporation. A PLC can be incorporated within 15 working days.
How to start/form/make a Private Limited Company?
- Steps to be taken to get a new company incorporated:
- Selection of an appropriate name
- Application to concerned ROC
- MOA and AOA
- Filling of the Forms and Documents
Registration of a Pvt Ltd organization in India is completely an online cycle. Recently the MCA has replaced the previous SPICe structure with another web structure called SPICe+ (SPICe Plus). Henceforth, Incorporating a Private Limited Company is much simpler now.
Try not to miss documenting Form INC 20A once you start your organization.
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Compliance required by a Private Limited Company
Each Private limited company is required o get their GST Registration inside 30 days of business incorporation in India. GST Registration is required when the turnover is more than INR 40 lakhs or INR 20 lakhs in Special class states or If the business supplies products intra-state or Provides goods and services online.
When a Private Limited Company gets registered under GST, it becomes important to file GST returns for Private Limited Company. As filling of GST returns is mandatory for all the registered Taxpayers including companies. GST returns can be filed monthly, quarterly, or yearly relying on the sorts of GST returns form you are filing.
Each Private Limited company shall maintain proper books of records which shall represent an accurate and fair view of the state of affairs of the company. Accounting is necessary for the statutory audit, Annual filing and IT return filing which is mandatory once you start your Company These books of records will be audited by the auditor appointed by the organization.
Each Private Limited Company registered under the Companies Act irrespective of its sales turnover or nature of business or capital must have its book of records or accounts audited each financial year. Subsequently, the Board of Directors of a Private Limited Company are legally necessary to appoint an Auditor within 30 days of incorporation and thereafter conduct an audit of its financial statements each financial year.
The Private Limited companies must get their accounts audited under MAT i.e. Minimum Alternate Tax. The objective of the introduction of MAT was to bring into the tax net “zero tax companies” which despite having earned substantial book profits and having paid handsome dividends, do not pay any tax due to various tax concessions and incentives provided under the Income-tax Law.
Income Tax Audit
Regardless of turnover, each Private Limited Company requires to get the tax audits under section 44AB done. The Tax audit under section 44AB aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law. The tax audit limit under section 44AB is INR 1 Crores (5 crores where at least 95 percent turnover is made on digital transaction
ROC Annual Filing
A Private Limited Company is mandatorily required to file 3 forms every year. Filing has to be done regarding submission of documents of financial statement, i.e. balance sheet, P&L account in ROC form AOC 4 and annual return in ROC form MGT-7. Company report about auditor’s appointment to ROC in Form ADT 1. Know more: ROC annual filings).
All the Private Limited Company which are engaged in the Import and Export of goods require to register the Import Export Code. IE code has lifetime validity. Importers are not allowed to proceed without this code and exporters can’t take benefit of exports from DGFT, Customs, Export Promotion Council, if they don’t have this code
Registering a Private Limited Company with a name does not provide complete protection to the name or brand name. Ultimate protection for a business name is secured only by Trademark Registration of same. By trademark registration, you may get the ownership of your Pvt Ltd Co. name or brand name or logo, etc.
Essential Documents for Private Limited Company Registration
- Passport Size Photograph of all the Directors
- PAN Card of all the Directors
- Identity Proof of the Directors (Driving License/Passport/Voter ID)
- Address proof of the Registered Office (Electricity Bill or any other Utility Bill)
A Private Limited Company must have a registered office in India. All Documents (like bank statements or electricity bills) must be recent. A utility bill, rent agreement or sale deed, and a NOC from the landlord with his / her consent to use the office as a registered office of a company must be submitted as well.
Advantages of a Private Limited Company
No minimum capital compulsion
No minimum capital compulsion to form a Private Limited Company. A Private Limited Company can be registered with a minimal sum of Rs. 10,000 as total Authorized Share capital.
Separate Legal Entity
A Private Limited Company is a separate legal Entity, meaning the assets and liabilities of the business are not the same as the assets and liabilities of the directors. Both are counted as different.
In a Private Limited Company, there would be Limited Liability for members means if there is any financial distress in the company because of whatsoever reasons, the personal assets of members will not be used to pay the debts of the Company.
Easy Shares Transferability
Shareholder of a company limited can easily transfer their shares to any other person as compared to the transfer of an interest in a business run as a proprietary concern or a partnership.
A Private Limited company in India can borrow funds from venture capitalists or investors.
Capacity to Sue and be Sued
To sue means to institute legal proceedings against or to bring a suit in a court of law. Just as one person can bring legal action in his/her own name against another in that person’s name, a company being an independent legal entity can sue and also be sued in its own name.
How to Incorporate Private Limited Company
Get DSC & Reserve Your Company Name
Submission of MOA & AOA
Get Company’s Incorporation Certificate.
Get Company’s PAN & TAN
Fill Simple Checklist
A compliance manager will get in touch with you to collect your documents along with a simple checklist. You need to fill up that checklist and submit along with your documents for verification. Our team of experts will verify the documents provided by you and take the procedure further. The compliance manager dedicated to you will keep you updated on the progress of Company Registration throughout the process.
Once your documents along with Checklist are submitted, we shall proceed with the application of your Digital Signature and subsequently the approval of your name for your Private Limited Company. You may suggest up to three names of your choice. Names should be unique and suggestive of the Company’s business. We will proceed with application for name for your Private Limited Company in Part A of SPICe Plus form.
We will draft the MOA (Memorandum of association) and AOA (Articles of association). We will file the incorporation documents with MCA through in part B of a form called “SPICe Plus (SPICe +)” along with the subscription statement. Usually, MCA approves the forms within 4-5 days once filed and issues Incorporation Certificate with CIN. PAN & TAN are allotted alongside. You may then proceed to open your Company Bank Account.