What is a Private Limited Company?
A private limited company is one of the ways to start your business in India. Startups and businesses with higher growth aspiration popularly choose Private Company as suitable business structure. In a private limited company, all business profits and liabilities belong to the company itself and stakeholders may not be responsible for debts incurred by the company.

Types of private limited companies

1. Private limited company by shares
A private company limited by shares is limited in capital based on the numbers of shareholders who are owed money on their shares. The liability of each shareholder is limited to the original value of the shares issued to them.

2. Private company limited by guarantee
When a company is limited by guarantee, it has members who act as its guarantors they can be liable only up to the amount that they have guaranteed. In addition, they may invoke this guarantee only in case the company is permanently shut down.

3. Unlimited companies
An unlimited company is a separate legal entity. Unlimited corporations are businesses that have no restrictions on the liability of their members. Each member's liability may extend over the entire company's debts. It means members' personal assets can pay off debts incurred by the company.

Key Features of Private Limited Company :

Members : Minimum 2 and Maximum 200

Directors : Minimum 2 and Maximum 15

Limited Liability :
The liability of all members or shareholders of a private limited company is limited. It means that when the company faces a loss under any circumstance, its shareholders will not be liable to sell their personal assets for payment. They will be liable to repay for only the amount of the shares subscribed or the guaranteed amount they have agreed to pay. Perpetual succession :
Perpetual succession means the company will continue to exist in the eyes of the law irrespective of insolvency, bankruptcy or death of any of its members. The life of the company continues to exist forever.

Authorised and paid-up share capital :
No Minimum capital is required

Name
A private limited company name must have the words ‘private limited’ after its name.

Prospectus :
A prospectus is a detailed statement providing the status of company affairs. A private limited company cannot issue a prospectus as it cannot invite the public to subscribe to its shares.

Resident Director :
Minimum one Resident Director.

Documents required

For Directors

• Copy of Adhaar card.
• Copy of PAN card.
• Email Address & Contact No.
• Passport Size Photo.
• Updated bank Statement Saving A/c).

For Office Address

• Electric Bill of office Address
• Rent Agreement of office, If Any
• NOC by Office Owner

Process of Pvt Ltd Company Registration

Following is private Limited Company Registration Process

Step 1: Obtain Digital Signature Certificate (DSC)
All the directors must obtain a DSC as it is required to file forms on the MCA portal and sign digital documents like the e-MOA and e-AOA. Even the subscribers and witnesses of the Memorandum of Association (MOA) and Articles of Association (AOA) must obtain DSC since they need to attach their DSC on the e-MOA and e-AOA that must be filed with the registration form.

Step 2: Obtain Director Identification Number (DIN)
The DIN is the unique identification number of a director. It is mandatory for a person proposing to be a director in a company to obtain a DIN. One DIN is sufficient to act as a director in any number of companies.

Step 3: Name Availability
The SPICe+ form (company registration form) allows for ‘name reservation’ in Part-A. A company can enter two proposed names in the SPICe+ form. In case of rejection of the name, the company has to file another SPICe+ form with the prescribed fee.

However, when the ROC approves the name, it will be reserved for 20 days, within which the company must fill and submit Part-B of the SPICe+ form. A company can also apply for the proposed name and application for incorporation together, i.e. Part-A and Part-B of the SPICe+ form can be submitted together.

Step 4: Form SPICe+ INC-32
The company must complete and submit Part-B of the new SPICe+ form on the MCA portal. Many services are consolidated in the SPICe+ form.

It provides the following services and benefits in a single application:

• Reservation of company name
• Application for allotment of DIN (Director Identification Number)
• Application for PAN and TAN
• Application for EPFO registration
• Application for ESIC registration
• Application for opening a company bank account

The DSC of a professional is required to complete the SPICe+ form. The professional should certify that the information provided in the form is correct.

Step 5: e-MOA and e-AOA
e-MOA means electronic Memorandum of Association, and e-AOA is electronic Articles of Association. E-MOA and e-AOA are filed online on the MCA portal as a linked form with the SPICe+ form. Both these forms should contain the DSC of the subscribers to the MOA and AOA.

Step 6: PAN and TAN application
A company can apply for PAN and TAN through the SPICe+ form. After submitting the SPICe+ form, the system will auto-generate the company PAN and TAN. The Certificate of Incorporation is issued with the PAN allotted by the Income Tax Department.

When all the details in the SPICe+ form are correct, and the company submits the required documents, the ROC will approve the registration and a CIN (Corporate Identity Number) to the company. It will also send the Certificate of Incorporation to the company at its registered office address.

Advantages of a private limited company

1. Reduced risk of personal liability
As a sole trader, you are personally liable for all the debts and liabilities of your business. In a private limited company, you and any other shareholders are only liable for debts up to the value of your shares. That reduces the risk of having your personal assets seized to pay for the debts of the business if it fails.

2. Higher business profile
A private limited company is perceived as more substantial than businesses run by a sole trader. When customers place orders or award contracts, they want to be confident that the supplier has the resources to provide a reliable service. The perception is also shared by investors, so it may be easier to attract funding as a limited company.

3. Lower taxation
Tax rate of Private limited Company is comparatively lower than Sole Proprietorship firm, Partnership Firm, Limited Liability Partnership Firm.

4. Easier access to growth funds
As we mentioned earlier, private limited companies have access to a wider range of funds for growth, including bank loans, venture capital and crowdfunding because investors see limited companies as a lower risk. You can also raise capital by selling shares in your business, although you cannot offer them for public sale.

5. Protected business name
When you register your business name, the name is protected and cannot be used by any other business.

6. Separate Legal Entity
A separate legal entity should be treated differently from the owners of a business. This means that it should not be treated as an individual in accounting. An individual owner may treat an asset as his personal property and therefore treat the assets as his own. It has a separate bank account, separate transactions and separate payroll. The separate entity concept protects business owners from financial liability by avoiding personal liability.

How REGISTRIC SOLUTION Help in Company Registration Process?

With REGISTRIC SOLUTION, you can establish your company in just 10 days. Our company registration package includes:

• Name approval of your company
• Obtaining DIN for two directors
• Filing SPICe+ form
• Issuance of Incorporation Certificate along with PAN and TAN
• Opening of current account for your company

The company registration from REGISTRIC SOLUTION is completely online and thus, you can save time and money as you do not have to visit our office. Plus, you can register your company in just 4 simple steps, which are:

Step 1: Purchase the plan
Purchase our company incorporation plan that suits you the best. You can even chat with our experts by entering your email, phone number and clicking on the ‘Request a Callback’ button. You can also contact us by sending an email with your queries at registric125@gmail.com. Our experts will contact you and clear all your queries.

Step 2: Send the documents to us
Send the required documents on our registric125@gmail.com. The documents will be collected by our executive.

Step 3: Document verification by our experts and signature of documents
Our experts will verify the documents send by you. You will need to attest your signature on the documents.

Step 4: Our experts will file the form on the MCA portal
Our experts will file the company incorporation form on behalf of you on the MCA portal. After the company incorporation form is filed on the MCA portal, the ROC and the respective departments will verify the forms submitted by our expert. The verification process takes around 10 days (subject to departmental approval and reverts from the respective departments).

Our experts will follow up with the respective authorities till you receive the Incorporation Certificate. After the verification process is complete, you will receive the Incorporation Certificate along with PAN and TAN in about 10 days.