What is a Private Limited Company in India?

A private limited company in India is a business entity with limited liability, making it a popular choice for entrepreneurs. Here are its key features:

• Limited Liability Protection: Shareholders' liability is limited to their shareholding, safeguarding personal assets.
• Separate Legal Entity: The company has its own identity, owning property and engaging in legal actions.
• Minimum Shareholders and Directors: Requires a minimum of two members and two directors, with one being an Indian citizen.
• Minimum Share Capital: Must maintain a minimum paid-up capital of Rs. 1 lakh.
• Name Requirement: The company name must end with "Private Limited."
• Share Transfer Restrictions: Transfer of shares requires Board approval.
• Prohibition on Public Invitation: Cannot invite the public to subscribe to shares or debentures.
• Compliance Requirements: Must adhere to legal obligations, including financial records and annual filings.

Types of Private Limited Companies:

• Company Limited by Shares: Shareholders' liability is limited to the share amount.
• Company Limited by Guarantee: Member liability is limited to the guarantee amount.
• Unlimited Companies: Members have unlimited liability.

Advantages of a Private Limited Company:

• Limited Liability: Shareholders' responsibility is limited.
• Distinct Legal Identity: Independent legal identity.
• Continuous Existence: Persists despite changes in shareholders or directors.
• Ease of Funding: Easier to raise capital by issuing shares.
• Tax Benefits: Qualifies for tax benefits.
• Credibility and Trust: "Pvt. Ltd." instills a sense of confidence and reliability.

Disadvantages of a Private Limited Company:

• Compliance Burden: Faces regulatory demands due to higher compliance.
• Complex Setup: Higher process and cost.
• Share Limits: Restricted share transfers; max 200 shareholders.
• Public Disclosure: Financial info is publicly viewable.
• Exit Complexity: Selling is more complicated.
• Slower Decisions: Involvement may slow choices.

Requirements for Registering a Company in India:

• Directors and Members:
  • Minimum two directors and 200 members.
  • Directors need Director Identification Number (DIN).
  • At least one director must be an Indian resident.
• Company Name:
  • Reflect principal business activity.
• Address of Registered Office:
  • Permanent address for business operations.

Company Registration Process:

• Acquire Digital Signature Certificate (DSC): Obtain for directors and shareholders.
• Director Identification Number (DIN): : Directors must obtain DIN.
• Name Reservation (SPICe+ Part A): Propose names for approval.
• Submission of Company Details (SPICe+ Part B): Provide information and attachments.
• Incorporation Forms (SPICe+ MOA and AOA): Draft MOA and AOA and submit.

Certificate of Incorporation: Issued upon document verification.

Document Checklist:

• For Indian Nationals: PAN card, Aadhaar Card, proof of identity, and address proof.
• For Foreign Nationals: Notarized documents, passport, and address proof.
• Registered Office Documents: Proof of business address and owner's no objection certificate.

Post-Registration Compliance:

• Adhere to post-registration compliances.

Register Your Company through Vyapar Samadhan:

Vyapar Samadhan specializes in Company Registration, providing expert guidance and support. We assist in name selection, documentation, DSC and DIN acquisition, and ensure compliance. Trust Vyapar samadhan for a seamless private limited company registration experience.