A Private Limited Company is the most popular form of corporate legal entity to be registered in India. The Ministry of Corporate Affairs governs private limited company registration as per the Companies Act, 2013 and the Companies Incorporation Rules, 2014. It can be initiated with a minimum of two Directors (Individuals only) and two Shareholders (Individuals or Corporate entities). Both Directors and Shareholders may or may not be the same person.
A Private Limited Company registration is preferred as it ensures limited liability and provides a separate legal entity to the business. The company registration procedure results in clear ownership of the company defined by the share capital. Incorporation of a company is the first step in scaling your business as it paves the way for outside funding while enabling you to attract top talent by offering stock options. However, one needs to take into account mandatory audit and higher compliance which could be tough to maintain. On the other hand, higher compliance will lend a better credibility to your business than any other form of incorporation of a company in India.
The liability of the shareholders of a Private Limited Company is restricted to the capital invested in the company, hence limiting the risk to the business Investment and preventing personal assets from the risk of attachment.
A Private Limited Company is the most preferred entity type for Investors. Registering a private limited company will give you an opportunity to raise funds via bank loans, Angel Investors, Venture Capitalists, etc.
It is difficult for startups to attract and retain talent due to uncertainty involved. Private limited company registration in India instils confidence and helps you attract the right talent.
A Private Limited Company also commands better credibility when compared with an LLP or a proprietorship firm. From corporate customers to the government, a private limited company will also have an edge in securing the business.
DIN which is a unique Identification number for directors and DSC a Digital Signature Certificate comprising the E-signatures, are prepared.
Two proposed company names (along with their justification) are applied online via the RUN form on the MCA portal.
E-Form SPICe INC-32 is prepared and filed along with the required documents with the MCA for approval.
Once the E-Form SPICe INC-32 is approved the Certificate of Incorporation is provided via E-mail
Spice means Simplified Proforma for Incorporating Company electronically which provides a single window for multiple applications under one form. The applicant can apply for Company registration with name approval (If not approved through RUN), DIN of two directors, TAN and PAN of the Company under the Spice Process.
Form Spice (INC 32), Spice MOA (INC 33) and Spice AOA (INC 34) are required to be filed under the linked form.
There is no minimum paid-up capital as of now for company incorporation.
The authorised capital is a maximum share capital of the company which sets limit within which the shares are issued by the company.
Paid-up capital is the shares issued by the company to its shareholders for raising capital but not exceeding the authorised capital.
No, it is not mandatory to have separate commercial office space as one can use a residential or rented home address as the registered office address of the company. After incorporation, the registered office address can be changed and intimation can be made to ROC within 30 days.
ROC (Registrar of Companies) is an office under the Indian Ministry of Corporate Affairs which governs the entire activities of the Companies as per Companies Act 2013 and LLP as per Limited Liability Partnership Act 2008 and keeps a record of all changes by the companies as intimated from time to time.
There are currently 22 Registrars of Companies (ROC) operating from offices in all major states of India and some states like Maharashtra and Tamil Nadu, have two ROCs each. Every Company get registered under the respective ROC depending upon the state within which the registered office is located.
MOA (Memorandum of Association) and AOA (Article of Association) are the set of laws prepared in accordance with prescribed schedules under Companies Act and defines the objective and the purpose of the company being incorporated.
After company incorporation, a bank account is required to be opened in its name and the paid-up amount can be deposited within six months of incorporation within that bank account, and Form INC 20A with proof of deposit of subscription money is required to be filed.
Yes, NRI can become director of the Company in India. The additional documents required apart from Indian director are
Copy of Passport duly attested by Consulate of Indian Embassy or Foreign Public Notary.
Copy of Driving License/Utility Bill/ Bank Statement duly attested by Consulate of Indian Embassy or Foreign Public Notary.
Director is a person who is appointed on the board to manage the business of the company. In contrast, shareholder is the person who purchases the shares of the Company and provides the funds. So, the company can have the same person as the director as well as shareholder or both the person can be separate.
No, the physical presence of directors and subscribers are not required for the incorporation process.
The entire registration process can be completed within seven working days depending upon the time taken by the registrar for approval of the application filed. If the forms don't get approved in the first application, then the time period for completing the process may get extended accordingly.
As per spice, DIN is allotted to a maximum of three directors through a single window of spice.
Further,the DSC of only two directors/subscribers is included in the package, and any addition will be charged additionally.
Bhanu is a person to count upon, with his expertise in his domain and knowledge he brings on you can reach him with a problem any time. His appetite to listen and understand the issue makes him the man for the job. He is proactive, energetic and a resourceful guy. My best wishes to Bhanu and Startup seven for future endeavour.
Founder at Addensure Media LLP
Startup Seven is perfect to partner with in your startup or corporate journey. Seamless service and support provided by team is really helpful specially when you are trying to setup your venture. I would like recommend Startup Seven to every startup.
Founder Onmytap - NETWORK FOR PROFESSIONAL GROWTH
Bhanu is one of the most sincere and trustworthy person I have come across. He is extremely ethical and is completely customer focused. His hard work and dedication is commendable and with him handling the legal as well as taxation things are always in order and compliant. Keep up the good work Bhanu. Wishing you more and more success as you grow.
Co-founder, Executive - Brightsandz Clean Tech Pvt Ltd