How to Register a Private Limited Company in India (A step-by-step guide)

Register a Private Limited Company in India

Before starting any business, it is important for the founders or business owners to ensure they decide on the legal structure of their business from various alternatives available in their respective countries to avoid legal consequences from the government, tax authorities, competitors, customers, vendors and all other stakeholders. Each and every idea gets converted into a business by adopting one of the following legal structures:

However, registration of a Private Limited Company is the preferred choice of registration of many startups considering the benefits and comfort it provides to the businesses.

Fear not, in this blog post, we would explain you all about Private Limited Company registration in India. From navigating the whole process to explaining the legal jargons, we’ll guide you step by step through the process, ensuring that your business starts off with a solid and clear legal process.

Steps To Register a Private Limited Company in India

Registration of a Private Limited Company seem to be a lengthier process starting with selecting a name for the business to drafting and submitting of various forms with the concerned regulatory authorities and getting the same approved to kickstarting the business. Our experts at Bright Accounts ensures all of these process gets done within 7 days making it hassle-free for startup and business owners at lowest price compared to other competitors. Anly business who wants to start with incorporation of a Private Limited Company should go through the following steps namely:

1.     Conducting Name Availability Search:

  • Identify a unique name for the company and ensure that it is available for registration by conducting an availability search on the Ministry of Corporate Affairs (MCA) website.
  • The name should comply with the naming guidelines and not infringe upon any existing trademarks.

2.     Obtaining Digital Signature Certificate (DSC):

  • Obtain Digital Signature Certificates (DSC) for all proposed directors of the company.
  • DSC is required for digitally signing the incorporation documents and other forms submitted to the Registrar of Companies (RoC).

3.     Obtaining Director Identification Number (DIN):

  • Every director of the company must obtain a Director Identification Number (DIN) from the MCA.
  • DIN is a unique identification number required for directors to manage company affairs and sign documents electronically.

4.     Drafting Memorandum of Association (MoA) and Articles of Association (AoA):

  • Draft MoA and AoA, which define the objectives, rules, and regulations governing the company.
  • These documents outline the company’s structure, share capital, and internal governance framework.

5.     Filling Incorporation Forms:

  • Fill the required incorporation forms, such as SPICe (Simplified Proforma for Incorporating Company electronically) or SPICe+.
  • Provide details of directors, shareholders, registered office address, share capital, and MoA/AoA.

6.     Submission of Documents to Registrar of Companies (RoC):

  • Submit the filled incorporation forms along with necessary documents to the RoC within the jurisdiction where the registered office of the company is situated.
  • Documents include MoA, AoA, address proof, identity proof, PAN card, and address proof of directors, among others.

7.     Payment of Registration Fees:

  • Pay the prescribed registration fees online through the MCA portal.
  • Fees vary based on the authorized share capital of the company.

8.     Verification and Approval:

  • The RoC verifies the submitted documents and information provided in the incorporation forms.
  • Upon successful verification, the RoC issues a Certificate of Incorporation, confirming the formation of the Private Limited Company.

9.     Obtaining Certificate of Incorporation:

  • Once the RoC approves the application, the Certificate of Incorporation is issued electronically.
  • This certificate serves as conclusive evidence of the company’s existence and legal identity.

10. Applying for PAN and TAN:

  • Apply for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the company.
  • PAN and TAN are required for taxation purposes and opening a bank account.

11. Opening Bank Account and Commencing Business Operations:

  • Open a bank account in the name of the company using the Certificate of Incorporation and other required documents.
  • Commence business operations as per the objectives outlined in the MoA.

Benefits of Registering a Private Limited Company

Benefits of Registering a Private Limited Company

Limited Liability Protection: This means that the personal assets of shareholders are protected, and their liability is limited to the amount invested in the company. 

Credibility and Trustworthiness: A registered Private Limited Company displays credibility and trust in the eyes of customers, suppliers, and investors. 

Access to Funding: Registering as a Private Limited Company enhances access to various sources of funding. Whether seeking equity investments, bank loans, or venture capital, investors and financial institutions are more inclined to invest in registered entities due to the transparency and legal framework offered. 

Tax Benefits and Incentives: Private Limited Companies in India enjoy tax benefits and incentives provided by the government. From lower corporate tax rates for small and medium-sized enterprises (SMEs) to deductions for eligible expenses and exemptions on capital gains, the fiscal advantages can significantly impact the bottom line. By optimizing tax planning strategies, companies can maximize profits and reinvest in their growth initiatives.

Perpetual Existence: Unlike sole proprietorships or partnerships, a Private Limited Company enjoys perpetual existence. The company continues to exist irrespective of changes in ownership or management, ensuring continuity and stability in business operations. 

Ease of Expansion: The corporate structure of a Private Limited Company facilitates easier expansion and diversification of business operations. With provisions for additional shareholders, transferability of shares, and clear ownership structure, scaling the business becomes more feasible. Whether entering new markets or launching innovative products, the flexibility offered by registration enables entrepreneurs to seize opportunities for growth.

Compliance and Legal Protection: Registering as a Private Limited Company entails compliance with regulatory standards and legal obligations. While this may seem daunting, adherence to these requirements offers legal protection and mitigates risks for the business. By maintaining accurate records, conducting regular audits, and staying updated on regulatory changes, companies can navigate the legal landscape with confidence.

The Bottom Line

At Bright Accounts our experts guide you throughout the journey from the point of structuring the legal form of business till the stage of registration and starting of the business based on the business requirements. Click here to get a free consultation with our expects and get your registration of private limited company within 7 days at the lowest price.

Similar Posts