Introduction
Forming a Private Limited Company (PLC) is a popular way to start a business in India. Governed by the Companies Act, 2013, a PLC offers numerous benefits including limited liability, separate legal identity, and perpetual succession. In this comprehensive guide, we will walk you through the step-by-step process of forming and registering a Private Limited Company in India.
Benefits of a Private Limited Company
- Limited Liability: Shareholders’ liability is limited to their investment in shares.
- Separate Legal Entity: A PLC is a distinct legal entity separate from its owners.
- Perpetual Succession: The company continues to exist even if the owners change.
- Ease of Fundraising: Easier access to capital through equity funding.
- Enhanced Credibility: Increases credibility and trust among customers and investors.
Requirements for Registering a Private Limited Company
- Minimum of 2 and a maximum of 200 members.
- Minimum of 2 directors.
- One of the directors must be a resident of India.
- Unique name for the company.
- Registered office address in India.
Step-by-Step Process to Register a Private Limited Company
-
Obtain Digital Signature Certificate (DSC)
The first step is to obtain a Digital Signature Certificate for the proposed directors. This is required for filing online documents.
-
Apply for Director Identification Number (DIN)
Directors need to apply for a Director Identification Number by submitting the DIR-3 form along with proof of identity and address.
-
Name Approval
The next step is to choose a unique name for the company and get it approved by the Registrar of Companies (RoC). This is done by submitting the RUN (Reserve Unique Name) form.
-
File Incorporation Documents
Prepare and file the incorporation documents including the Memorandum of Association (MoA) and Articles of Association (AoA) with the RoC. These documents outline the company’s objectives, rules, and regulations.
-
Obtain Certificate of Incorporation
Once the RoC is satisfied with the submitted documents, they will issue a Certificate of Incorporation. This certificate serves as proof that the company is registered.
-
Apply for PAN and TAN
After incorporation, apply for the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
-
Open a Bank Account
Finally, open a bank account in the name of the company to facilitate financial transactions.
Compliance Requirements for a Private Limited Company
After registration, a Private Limited Company must adhere to various compliance requirements under the Companies Act, 2013, such as holding regular board meetings, maintaining statutory registers, filing annual returns, and more.
Conclusion
Registering a Private Limited Company in India involves several steps, but the benefits make it a worthwhile endeavor. By following the guidelines and ensuring compliance with the Companies Act, 2013, you can set a solid foundation for your business.
