28 Aug From Idea to Incorporation: Private Limited Company Registration

Profit-making private limited companies are owned by several people or organizations, and their liabilities are only as great as their ownership stakes. A private limited company can have as few as 2 shareholders and as many as 200 shareholders. Through this article, you will get deep insights about the registration process of a company in India, the requirements to set up a Pvt. Ltd. Company and other documentation requisites.

How to Register a Private Limited Company?

The first of the four-step procedure is submitting the SPICe+ forms and applying for a Digital Signature Certificate (DSC). After that, applying for the PAN and TAN is the next important step.

We’ll take you through the registration of a private limited company step by step, let’s begin!

Step 1:  Start the Process By Applying for Digital Signature Certificate (DSC)

Every director and shareholder of a private limited company is required to obtain a Digital Signature Certificate (DSC), according to the Ministry of Corporate Affairs (MCA). The Information Technology Act of 2000 mandates that this DSC be used on all paperwork used to securely submit electronic forms. The first step in securely submitting electronic documents is to obtain DSC. DSC is bought from the Controller of Certification Agencies (CCA). Its minimum validity is one year. However, the validity may be extended to two years.

To apply for DSC, each applicant must share the below mentioned information:

1) Passport Size Photographs

2) PAN (Permanent Account Number)

3) Aadhaar Card

4) Phone Number

5) Email Address

6) Address Proof Document

The documents of any directors or shareholders who are foreign nationals must also be notarized and apostilled.

Step 2: Continue With Applying for Name Reservation (SPICe+ Part A)

You must already have a few possible names for your company in mind. The top two choices should be entered into the SPICe+ Part A form, which is primarily used to reserve a unique and appealing private limited company name for your new private limited business. To fill up and submit this form, you will need the aid of working experts. You can choose between two names as a first option.

The SPICe+ Part A form has the below fields:

1. Type of Company: From the list of various company structures down at the bottom of the form, choose “Private Limited Company.” Producer Company, Unlimited Company, Section 8 Company, IFSC Company, Nidhi Company, and others are additional business structures.

2. Class of Company: This area denotes whether a company is a single person, a private, or a public one. ‘Private’ is the option for Private Limited Companies.

3. Company Category: Determine whether the company should be limited by shares, by guarantee, or have an unlimited number of shares. The most common option is to keep the company shares limited.

4. Sub-category of Company: With the assistance of the working professional, choose the pertinent subcategory.

5. Main sector of economic activity: Which sector will you be involved in? The main divisions have distinct codes assigned by the MCA. With the assistance of a working professional, select the option that best suits your company.

6. Main Division Description: In this section, you should thoroughly describe the nature of your business concept and the products and/or services you intend to provide to customers.

7. Proposed name of the company: Here, you can suggest two names that you want to use as the name of your business.

And that’s it! Your SPICe+ Part A form will be approved by the MCA within five to seven working days of submission. You will have a second chance to submit applications for two additional company name options of your choosing if both of the suggested names are denied or contested.

You must resubmit the SPICe+ Part A form if any of your four name choices are rejected. One should check the MCA portal to see if a company with a similar name is already registered before submitting the form.

The SPICe+ Part B form will be made available to you to continue the incorporation of your business once the names have been approved.

Step 3: Start Filing Details for the Proposed Pvt. Ltd. Company (SPICe+ Part B)

The SPICe+ Part B form is where you enter the most crucial information about your company. Make sure the practicing professional receives all the pertinent information. Eight parts must be filed for SPICe+ Part B:

1. Capital Details: To start, you must provide information about the total capital you are bringing to the company, also known as authorized share capital. Additionally, give accurate information regarding the shareholders’ subscribed share capital.

2. Registered Office Address: Next, you must include the address of the location where the company will conduct business as well as your phone number and email address.

3. Subscriber and Director details: Give each director of the company their DIN (Director Identification Number). If you don’t already have one, a working professional can help you get one.

4. Stamp Duty: Each state and union territory determines the government fees to register a company based on your authorized capital and registered address of the company. The working professional will assist you in determining the precise amount of Stamp Duty due.

5. PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) Application: For business operations and tax filing with the government, your company needs PAN and TAN accounts.

6. Attachments: For additional verification, provide the required documents in the proper formats to be uploaded as attachments. The required paperwork will be provided, but you should prepare the most important ones in advance, including a utility bill, the identification and proof of address of the first director and shareholder, the director’s approval, and the NOC (No Objection Certificate) from the owner of the registered address.

7. Declaration: We’re nearly done with this. Simply enter your digital signature to confirm that you adhere to the Companies Act 2013’s rules.

8. Declaration and Certificate by Professional: The SPICe+ Part B form will require the digital signatures of the working experts, such as CA, CS, or CMA, who are aiding you with the company registration procedure.

Step 4: The creation and submission of an incorporation form

By following the important clauses of the SPICe+ MOA (Memorandum of Association), the practising professional will draft and submit an incorporation form.

Let’s quickly and briefly understand the clauses:

– Name clause: You must state the chosen name of your business as well as the addition of “Private/Pvt Limited” after the business name.

– Registered office clause: This clause identifies the jurisdiction in which your company is registered.

– Object clause: This is the most crucial clause because it calls for the main idea—your plan for handling business operations—to be mentioned.

– The liability clause establishes that the member’s liability is constrained by the shares.

– Capital clause: The company’s share capital and your authorized capital are both mentioned.

– Subscriber clause: You must list the first shareholder’s information as well as the total number of subscribed shares.

After completing this, the subscribers and professionals attach the DSC to the MCA for submission along with it for approval.

Post Registration Compliances

Compliances are one of the things that need to be done after the private limited company is incorporated so that business owners can concentrate on their core functions. Additionally, it aids organizations in creating a proper system that outlines the responsibilities of shareholders and directors.

Minimum Requirements for Registering a Pvt. Ltd. Company

1. Minimum 2 directors

According to the most recent amendment to the Companies Act of 2013, one director must be an Indian citizen who has lived in India continuously for at least 12 months. One more might be a resident who is foreign or Indian.

2. Minimum 2 shareholders

Shareholders can be either an individual or a business. In the case of a corporate entity, a person is qualified to act in the capacity of a shareholder on behalf of the business.

3. Registered office address in India

Check that the company’s Registered Office (RO) must be in India. The business has the option of using a residential or commercial property as their RO Address.

4. Unique Business Name

The name of their company is something that entrepreneurs carefully consider. They must make sure it is suitably different, though. A suffix that identifies the company’s field of expertise, such as Mother Dairy Fruit & Vegetable Pvt Ltd, must also be present in the name. The company deals with dairy products, fruits, and vegetables just by looking at the name.

Document Checklist for a Private Limited Company Registration

For Indian Nationals:

– All Directors and members must provide self-attested copies of their PAN cards.

– Passport size photograph

– Copy of Aadhar Card

– Self-attested address proof that must be in the name of the director or shareholder (e.g., a recent bank account statement that includes the director’s or shareholder’s name, address, and the last page of transactions with recent activities)

For Foreign Nationals

All documents of a foreign director or shareholder should be notarized and apostilled.

– Passport size photograph

– Foreign subscribers must present a passport as identification of their nationality.

– Proof of address, a driver’s license, a bank statement, and utility bills that are no older than two months (though it differs from one country to another).

Documents for Registered Office

– Business address proof, including utility, phone, water, and gas bills, should be no older than two months.

– Owner’s PAN Card.

– A letter of approval from the property’s owner.

How long does it take to register a Private Limited company?

It takes approximately 15 to 20 working days for the entire process, including the approval of the DIN, Name, and incorporation. However, registering a company is an easy procedure thanks to MCA, which allows all documents to be combined into a single application form. It is a significant step towards e-governance and for companies looking to grow their operations.

Disclaimer: Overall timeline is completely dependent on the MCA’s operations.

There are many procedures involved in Private Limited company registration. It is important to choose the company’s structure before registering it, such as whether it should be registered as an OPC, LLP, PLC, or Public Limited company. Before applying for company registration, the directors of the company must first decide on the structure, and the company name, and obtain their DIN and DSC. It is therefore advised that these companies use the quick, reliable, and affordable company registration services of BizExpress right away!