Private Limited Company registration in India

Everything You Need to Know About Starting a Private Limited Company in India

Starting a Private Limited Company in India is a popular choice for new entrepreneurs. Let’s break down what a Private Limited Company is, its benefits, the costs involved, and how to start one.

What is a Private Limited Company?

A Private Limited Company is a type of business entity held privately by small businesses. The liability of the members is limited to the amount of shares they hold. It is a separate legal entity from its owners, which means it can own property, incur debts, sue or be sued.

Minimum Requirements

• Shareholders and Directors: At least 2 of each.
• Registered Address: A physical location in India, with proof of address.

Benefits of a Private Limited Company

• Limited Liability: Shareholders’ personal assets are protected in case of bankruptcy.
• Perpetual Existence: The company continues to exist even if the owners change.
• Fund Raising: Easier to raise funds through the sale of shares.
• Credibility: Often perceived as more professional and credible than unregistered entities.

Cost of Setting Up a Private Limited Company

• Government Fees: Including the cost of Digital Signature Certificates (DSC), is approximately Rs 4500.
• Professional Fees: Generally around Rs 5500.
• Total Cost: About Rs 10,000.

Steps to Form a Private Limited Company

Step 1: Check the Company Name

• Ensure your company name is unique and not a slight modification or translation of existing ones.
• Avoid minor changes like adjusting spacing, punctuation, or making the name plural.
• Names containing terms like “Bank” and “Insurance” require special approvals.
• Check your company name here to ensure it’s unique in India.

Step 2: Gather Pre-Registration Documents

• Digital Signature Certificate (DSC): Needed to confirm the authenticity of documents filed electronically.
• Director Identification Number (DIN): A unique ID required for anyone who wants to be a director.
• Memorandum of Association (MoA): Describes the company’s objectives and its shareholders.
• Articles of Association (AoA): Specifies the regulations for the company’s operations.
• Personal Documents: Include PAN, Aadhaar, and address proof for all directors, partners, or shareholders.
• Office Address Proof: Required to prove the location of your company’s office in Bangalore.
• Minimum Requirements: For a Private Limited or LLP, at least two people are required, with one being an Indian resident.

Step 3: Register Online

• Begin by creating your MCA Portal user ID.
• Fill out the SPICe+ form, noting that only directors with a DIN can apply.
• Submit all your prepared documents via the SPICe+ service on the MCA portal.

Step 4: Get Your Certificate

• Once your documents are successfully verified, the Registrar of Companies (RoC) in Bangalore will issue your Certificate of Incorporation.