Private Limited Company

What is the definition of a Private Limited Company?

In India, one of the most common types of legal entity is a Private Limited Company (PLC). The Companies Act, 2013 governs private limited companies, which must have at least two directors and two shareholders, one of whom must be an Indian resident and citizen.

The following are the minimum requirements for registering a company in India:

2 Directors – One of whom must be an Indian national and a resident of India.

2 Shareholders – Directors may be stockholders.

India is the registered office. In most sectors in India, 100% FDI is permitted, and there are no restrictions on foreign shareholding in a private limited company. As a result, the majority of foreign subsidiaries are established in India as private limited companies.


Documents Required for Online Private Limited Company Registration

     Aadhaar Card and PAN

     All Indian shareholders and directors must have a PAN and an Aadhaar card.

     Identity Verification

     The Shareholders’ and Directors’ Voter ID, Passport, or Driver License.

     Address Proof

     Copy of the Shareholders’ and Directors’ most recent Telephone Bill, Electricity Bill, or Bank Account Statement


     All Shareholders and Directors have current passport-size photographs.

     Proof of Business Address

     Either the most recent Utility Bill (Electricity, Telephone, Gas, Water) or the most recent Property Tax Bill for the registered office address. In the case of rented property, a rent agreement and a letter of authorization from the owner are required.

Advantages of forming a private limited company

There are numerous advantages to registering a Private Limited Company in India, including the following:

Protection of Partners’ Personal Assets: The shareholders of a Private Limited Company typically have limited liability.

As a result, if you are a shareholder, you will be held responsible for the company’s liabilities. However, only to the extent of your contribution to the company.

Srvassociates company registration experts can assist you in better understanding the “Indian private limited company registration process.”

In the eyes of the law, a Private Limited Company is a separate legal entity: In other words, the partners/owners of a PLC are a completely different entity according to the Indian constitution.

As a result, a company will be held accountable for the efficient management of its debtors and creditors, assets and liabilities.

You Can Raise Capital Easily: A private limited company registered in India must comply with a number of regulations.

Entrepreneurs generally prefer this type of business structure.

Because it enables them to raise the required funds through equity. It also enables them to broaden while limiting their personal liability.

It has the advantage of continuous existence:

The most important advantage is known as “Perpetual Succession.” It means that it will continue to exist until it is legally dissolved.

Because it is a separate legal entity, it is unaffected by the departure or death of any of its members.

Even if there is a change in existence, it will continue to exist.

The Advantages of Company Formation

There are numerous advantages to forming a corporation.

A registered company adds legitimacy to your company. It benefits your company:

●          Personal liability is protected, as are other risks and losses.

●          Increase your customer base.

●          With ease, obtain bank credits and good investments from reliable investors.

●          Provides liability protection to safeguard your company’s assets.

●          Increased capital contribution and stability

●          Increases the potential for large growth and expansion

How to Form a Private Limited Company

It only takes four steps to register a private limited company in 15 to 18 days. The same can be divided into the following major categories:

  • Step 1: Purchase DSC for Directors and Subscribers:

The first and most important step in forming a private limited company is to obtain the DSC of the Directors and Subscribers to the MOA. DSC is an abbreviation for Digital Signature Certificate. After attaching the DSC of the Authorised Signatory for Company Incorporation, any e-form is filed with the Ministry. It is also required for the application of the directors’ DIN. Furthermore, the subscriber’s DSC is required to file MOA and AOA.

  • Step 2: Obtain a Director Identification Number (DIN).

The term Director Identification Number is abbreviated as DIN. The Ministry assigns a DIN number to an individual for acting as a director in a company as part of the company registration process. DIN, like PAN Card, is unique to each individual and is only applied for and issued once in a lifetime.

  • Step 3: Approval of the Name

The next step in company formation is to apply for a name reservation for the proposed company. The application must be submitted in Form INC-1, with a maximum of six names listed in order of preference. Keep in mind that the names chosen are not identical or closely related to any existing Company, LLP, or Registered Trademark.

Once the name is approved, it is reserved for the applicant for a period of 60 days, during which time the applicant must apply for the Incorporation of Company, failure to which results in the withdrawal of the name granted by the Ministry.

  • Step 4: Request a Certificate of Incorporation

Once the proposed company’s name has been reserved, the applicant must file an Application for Certificate of Incorporation in SPICe form, along with SPICe MOA and SPICe AOA. The application is submitted by paying the applicable Stamp Duty on the portal in the case of the concerned state. Once the application is submitted, an online form for applying for the company’s PAN and TAN is generated, which must be duly submitted after attaching the DSC.

MOA and AOA formulation

The abbreviations for Memorandum of Association and Articles of Association are MOA and AOA, respectively. This is the final step in the process of registering a company and contains the two most important documents for any company.

The company’s MOA specifies the scope of its operations, whereas the AOA specifies how the company will carry out its operations in accordance with the Act. In the case of a Private Limited company, in addition to general clauses, the Articles must include the following three clauses:

The number of members is limited to 200.

Transfer of shares is restricted.

Accepting securities from the general public is prohibited.

To submit this application, first gather the following documents:

Utility bill and NOC from the owner for the Company’s Registered Office address.

If the premises are rented, a rental agreement must be reached with the owner of the registered office.

Consent to serve as a Director of the company in DIR – 2 form.

Affidavit and declaration in form INC – 9 (duly franked and notarized) by the first subscriber(s) and director(s).

Certified true copy of the first subscriber(s) and director’s self-attested identity proof (s).

The concerned RoC may grant the Certificate of Incorporation after due verification of the application and documents provided (COI).

It is a conclusive proof of the company’s existence, containing the date of incorporation, Company Identification Number (CIN), and Permanent Account Number (PAN), as well as the Registrar’s signature and seal.

Once the Certificate of Incorporation is issued, the company can begin conducting business as soon as the Incorporation procedure is completed.

How to Choose a Business Name

  • Name that is distinct

A distinct name that is not already registered as a company or trademark has a better chance of being approved by MCA.

  • Commercial Activity

The second part of the name should ideally indicate the company’s business activity.

  • Suffix to a name

The company’s name must end with Pvt. Ltd. or Private Limited Company.