Private Limited Company Registration Process
Introduction
A Private Limited Company (Pvt Ltd) is one of the most popular business structures in India. It is registered under the Companies Act, 2013 and regulated by the Ministry of Corporate Affairs (MCA). A Private Limited Company offers limited liability protection, a separate legal entity status, and the ability to raise funds easily. Due to its credibility and structured compliance requirements, it is a preferred choice for startups and growing businesses.
Features of a Private Limited Company
- Limited Liability – Shareholders are only liable up to their shareholding in the company.
- Separate Legal Entity – The company is distinct from its owners and can own assets, enter into contracts, and sue or be sued.
- Perpetual Succession – The company continues to exist even if directors or shareholders change.
- Restricted Share Transferability – Shares cannot be freely transferred without shareholder consent.
- Minimum & Maximum Members – Requires at least 2 directors and 2 shareholders, with a maximum of 200 shareholders.
- Foreign Direct Investment (FDI) – 100% FDI is allowed under the automatic route in most sectors.
Benefits of Registering a Pvt Ltd Company
- Limited Liability Protection – Owners’ personal assets remain protected.
- Better Credibility & Trust – Recognized as a more professional business entity.
- Ease of Raising Funds – Can attract investments from venture capitalists and angel investors.
- Tax Benefits – Lower corporate tax rates compared to proprietorship and partnership firms.
- Separate Legal Identity – The company can own assets and conduct business in its own name.
- Perpetual Existence – Unaffected by the resignation or death of shareholders.
Step-by-Step Registration Process
- Obtain Digital Signature Certificate (DSC) – Required for filing forms electronically.
- Apply for Director Identification Number (DIN) – Unique identification for company directors.
- Name Approval via RUN Service – Choose and reserve a unique company name with MCA.
- Draft & File Incorporation Documents (SPICe+ Form) – Submit the application along with MOA (Memorandum of Association) and AOA (Articles of Association).
- Certificate of Incorporation Issuance – Upon approval, MCA issues the Certificate of Incorporation, including PAN and TAN.
Documents Required for Private Limited Company Registration
- Identity Proof – PAN Card of directors and shareholders.
- Address Proof – Aadhaar Card, Passport, Voter ID, or Driving License.
- Registered Office Address Proof – Utility bill (Electricity/Water/Gas) and a NOC from the property owner.
- Memorandum of Association (MoA) & Articles of Association (AoA).
- Declaration & Consent of Directors (DIR-2 Form).
Government Fees & Registration Time
Government Fees for Registration:
- For Companies with Authorized Capital up to ₹10 lakh: Approx. ₹7,000 to ₹10,000.
- For Companies with Higher Authorized Capital: Varies based on capital and state.
- Professional Fees: Additional charges may apply if using a consultant or legal expert.
Time Required for Registration:
- Name Approval: 1-2 working days.
- Incorporation Filing & Approval: 5-7 working days.
- Total Registration Time: Typically 7-10 days, subject to government processing times.
What You Get Once Your Application is Approved
Once your Private Limited Company registration application is approved by the Ministry of Corporate Affairs (MCA), you will receive the following:
- Certificate of Incorporation (COI) – Official document confirming the company’s registration.
- Company Identification Number (CIN) – Unique identification number assigned to the company.
- PAN & TAN – Automatically issued and mentioned in the Certificate of Incorporation.
- Memorandum of Association (MoA) & Articles of Association (AoA) – Defines the company’s objectives and operational framework.
- Director Identification Numbers (DINs) – Issued for the directors of the company.
Post-Incorporation Compliances
Once the company is registered, the following compliances are mandatory:
- PAN & TAN Issuance – PAN and TAN are now automatically issued by MCA at the time of incorporation and mentioned in the Certificate of Incorporation.
- Open a Business Bank Account – Mandatory for business transactions.
- GST Registration – Required if turnover exceeds the prescribed limit.
- Commencement of Business (INC-20A) – Declaration to be filed within 180 days.
- Director KYC Compliance (DIR-3 KYC) – To be filed annually.
- Annual Compliance Filing – Financial statements and annual returns.
Frequently Asked Questions (FAQs)
1. Can I register a Pvt Ltd company with only one director?
No, a minimum of two directors is required. However, you can register a One Person Company (OPC) if you are the sole owner.
2. Can a private limited company be converted into a public company?
Yes, a private limited company can be converted into a public company by altering its Articles of Association and meeting the regulatory requirements.
3. What is the minimum capital requirement for Pvt Ltd registration?
There is no mandatory minimum capital requirement, but ₹1 lakh is generally used as an initial capital.
4. Can NRIs or foreign nationals register a Pvt Ltd company in India?
Yes, NRIs and foreign nationals can be directors and shareholders in a Pvt Ltd company, subject to compliance with FDI regulations.
5. Is it mandatory to have a registered office?
Yes, a registered office address in India is mandatory for company registration.
6. Can a Pvt Ltd company have only family members as shareholders?
Yes, a Pvt Ltd company can have only family members as shareholders, making it a family-owned business.
7. Can I change the company name after registration?
Yes, a company name can be changed by passing a special resolution and obtaining MCA approval.
8. Is audit mandatory for a Pvt Ltd company?
Yes, every Pvt Ltd company must get its financial statements audited annually, regardless of turnover.
9. Can a Pvt Ltd company be closed voluntarily?
Yes, a Pvt Ltd company can be closed voluntarily through the Fast Track Exit (FTE) scheme or by liquidation.
10. What are the penalties for non-compliance with company laws?
Non-compliance may lead to penalties, disqualification of directors, or company strike-off by the MCA.
Conclusion
Registering a Private Limited Company in India is a smart decision for entrepreneurs looking to build a scalable and legally structured business. It offers limited liability, credibility, and ease of raising funds. While the registration process is straightforward, professional assistance ensures hassle-free compliance. For a smooth company registration, consult legal experts or company registration service providers.