In India, there are two companies that are limited by shares; Private Limited and Public Limited Company. Public Limited Company is a company whose securities are traded in the stock...
A company is registered under the Companies Act 2013, pursuant to the applicable rules and regulation of the Companies Act 2013. To start with, out of available options of LLP, Partnership firm, OPC, Private Company, a public company, it is suggestive to start with the private company, as it is a good mixture of corporate and LLP characteristic, that too at lesser compliance requirement. In this article we will discuss registration process of private company
What is the Minimum Requirement of a Private Limited Company Registration in India?
To open a private company, one needs to apply at MCA portal online, by filing the application E-Form Spice 32. Minimum of 2 Directors are required and the maximum directors in a company can be 15. It is mandatory that one of the directors of a private limited company has to be an Indian Citizen and Indian Resident. Minimum Two of the shareholders are required to formulate a company. The shareholders can be natural persons or even an artificial legal entity, which could be two corporate, which are domiciled in India or abroad.
A private company enjoys easy transferability of shares, it can raise fund through the issuance of equity shares, preference shares, debentures. With the permission of RBI, it can also obtain accept deposits. As compared to LLP and partnership firm, the private company is preferred to be given loan by the financial institution. At the same time, no shareholder can claim the right over the company until the company has defaulted explicitly with regard to the shareholder rights.
How to set up a Private Limited Company?
Now with the introduction of Spice form, a company can be formulated in a few days and the same form can be used for Company incorporation and to apply for the PAN and TAN of the company. The application for incorporation can be filed with the help of Company Secretary, Chartered accountant, or such other authorized person or consultancy. The very first step towards company registration is to apply for the name approval; after that, one needs to proceed for the company incorporation form in Spice Form 32. In case the directors do not have DIN apply for it, also the authorized signatories must have the DSC. The AOA and MOA must be formulated and attached in the incorporation from, the attachments also include the identity proof of the authorized signatories, Directors, and registered office address proof.
On successful submission of the incorporation form, it shall be reviewed by the registrar and after proper scrutiny on finding everything proper, the certificate of registration shall be granted. Even the NRIs, foreign nationals and foreign entities can register a company and can also invest in India, through adherence to the Foreign Direct Investment norms issued by the RBI.