STARTUP REGISTRATION SIMPLIFIED
In a private company, the business owners hold all shares of the company privately. Shareholders may operate the business themselves, or hire directors to manage the company on their behalf. Forming a private limited company results in protection of personal assets, access to more resources, financial assistance and greater credibility.
Private Limited Company advantages
Starting a Private Company typically provides a number of advantages:
Private Limited Company Registration Procedure
Step1: Identify a minimum of 2 shareholders and 2 directors:
For registering a private company, a minimum number of 2 shareholders and 2 directors are required; at least one should be an Indian Resident. Shareholders may be individuals, companies or LLPs, but only individuals can become directors of a company. A director need not be a shareholder of the company and shareholders need not necessarily be directors as well.
Shareholders / Members are the persons holding shares in a company. Directors of company are responsible for the management of the company affairs and legal compliance under various laws. Directors are normally appointed by shareholders. Indian company laws specify that only an individual can be appointed as a director of a company.
Step2: Obtain a Director Identification Number (DIN) for all proposed directors:
The proposed director must have a DIN allotted by the Ministry of Corporate Affairs. DIN can be obtained by filing an online application with a copy of ID and address proofs. PAN Card is mandatory for Indian nationals for applying a DIN, Passport is enough for the Foreign National. For taking DIN the Digital Signature Certificate is required.
Step3: Obtain a Digital Signature Certificate (DSC) for directors:
During the registration process, all the documents are submitted to the ROC online through www.mca.gov.in. These forms need to be authenticated by signing it using a Digital Signature Certificate issued by the Certifying Authority in India. Directors of the Company should have a digital signature certificate to authenticate documents that are submitted to the ROC.
Step4: Identify the location and authorized capital of the company:
It is important to have a proper address for the company's registered office. The address need not be a commercial location for registering a company. It could be the residential address of one of the promoters or any other identifiable address. The ROC will send all the correspondence relating to the company to the registered office address. The jurisdiction of the ROC will depend on the location of the registered office.
A private limited company should have no minimum paid-up capital limit. Authorized capital can be any amount. Company registration fee varies depending on the authorized capital of the company.
Step5: Company Name Application:
The name of the company should end with the words 'Private Limited’. Before proceeding with the incorporation process, an application has to be filed for getting the company name approval from the ROC. It is preferable to submit the application with multiple names in the order of preference. Company name application must be in line with the Company Name Guidelines. Company name application is filed in INC-1 to the Ministry of Corporate Affairs, Government of India, to check the availability of the proposed name for registration of a new company.
Once approved, the name will be reserved for 60 days. Company registration documents have to be executed and filed within this time line.
Step6: Execution of company registration documents:
After the company name is approved, the company incorporation documents such as MOA and AOA have to be executed by the promoters in the prescribed format.
MOA and AOA have to be executed by the subscribers, they have to write all details such as name, father's name, residential address, occupation and the number of shares they agree to take on in their own handwriting. They will then have to sign the document and should enclose the signature of a witness who knows the subscribers.
Step7: Submission of company registration documents to the ROC:
Once the MOA and AOA are executed, Copy of the same has to be submitted to the ROC of the respective state for the company registration. The originally executed MOA and AOA are not required to be filed with the ROC. The same has to be preserved by the promoters for future reference. Along with incorporation documents, details of directors and registered office are also required to be filed with the ROC.
Step8: Company Registration and Certificate of Incorporation:
The ROC will register the company after due verification of MOA, AOA and other details and will issue the Certificate of Incorporation (COI). It will also allocate a Corporate Identification Number (CIN) to the company so registered. The COI is now issued by the ROC in digital form with the digital signature certificate. No physical certificate will be issued by the office of ROC. A private company can commence its business after obtaining the COI and Certificate of Commencement of Business.
Please find below the checklist of documents and information required for to initiate the process: