In India, Private Limited Company is one of the best options to start-up a business. The entity must be registered as per the regulatory guidelines and Compliance of Ministry of Corporate Affairs (MCA). Private Limited Company is defined under section 2(68) of Companies Act, 2013. Private Limited Company is the form of entity being held by few members or a small group of people. Companies Act further confirms that there is no minimum capital requirement to start a Private Limited Company.
In a Private Limited Company, the owner's liability is limited to the number of shares he holds. Law imposes restrictions on the number of members who can own a company. The number of shareholders is limited to 200. The shares by the members or the shareholders are constrained from being publicly traded. Private Limited Company should have at least Two Directors and the maximum number of Directors is restricted to 15.
A few considerations are necessarily needs to be made before you go ahead with the plan of starting a Private Limited company. Ensure that you are ready with the decisions of the following points:
- 1 ID Proof (PAN Card, Aadhar Card, Voter ID Card, Passport etc)
- 1 Address Proof (Aadhar Card, Voter ID Card, Passport etc)
- 1 Passport size Photo in softcopy
- 1 Specimen signature in soft copy
- 1 Utility Bill (Bank Statement, Mobile Bill, Electricity bill not older than 2 months)
- *In case of non residents, it should be apostilled from the notary public of that country.
- NOC from the owner of property
- Electricity or Water bill not older than 2 months
- Rent Agreement
Application filing for Digital Signatures.
Spice+ Part A of the form to reserve the name that you are proposing for your company.
The next step includes filing of incorporation forms that includes Spice+ Part B, Spice MOA, Spice AOA and Spice Agile Pro.
After the verification of all the provided documents, the Registrar of Companies (ROC)issues the Certificate of Incorporation (COI) to company.
Open the Current Account of Company
Filing of INC-20A for Certificate of Commencement of Business.
ROC is referred to as the Registrar of Companies, whereas MCA stands for Ministry of Corporate Affairs. These bodies govern the formation, compliances and regulations of PrivateLimited Companies.
Choose a unique name that is not similar to the companies already registered. You can visit the website of ROC to check whether your proposed name is registered or not. Your name of the company can be different from the name of your brand.
Spice stands for Simplified Proforma for Incorporating Company Electronically. It is the mechanism to promote the Ease of Doing Business via simplifying the procedure of formation of company.
DSC refers to Digital Signature or e-signature. It is in the form of e-token which is required for the formation of company and post formation compliances of ROC and other laws.
It is mandatory for a Private Limited Company to have a statutory auditor. A company need to appoint an individual chartered accountant or a firm of chartered accountants. You will need to appoint an auditor within 30 days from the date of formation in your first board meeting.
No, physical presence is not required. Proper documents are needed to form a company in a soft copy which needs to be uploaded online at the time of formation of company..
Director and Shareholder may or may not be a same person so a person can be a shareholder without or with being a Director or vice versa.
The term founder of a company is not particularly defined by the law. Founders are generally the promoters of the company who set up the company in the beginning.
Shareholders may transfer the shares between them after executing the Share transfer Deed (SH-4) and payment of consideration and stamp duty thereon.
Private Limited Company needs to do lot of post formation compliance which includes the compliance laid down by Registrar of Companies (ROC) or the income tax act or the GST law or FEMA and other allied laws.
MOA refers to Memorandum of Association which mainly gives the objects, state and capital of company, and AOA refers to Articles of Association which are the byelaws of the company which defines its rules and regulations.
It refers to a situation when the founders or other shareholders sell their shares wholly or partially and choose to depart from the company.
Change of address in the same state is very simple. It is generally done in a day or two. You need to submit the electricity bill and the NOC. However, if you want to change the registered Office address to the different state, it required Regional Director (RD) approval and take lot of efforts and cost.
The company needs to first hold a board meeting to take approval on this change, the incoming director needs to apply first for the Director Identification number (DIN) and we need to file the form with ROC for his addition.
Before altering either the MOA or AOA, an extraordinary general meeting is required to be held. The points of discussion are extracted and filed to the ROC. ROC will then alter the requirements in a span of 3-4 days.
In every state, it is essential to pay stamp duty on the issuance of shares. For instance, in Delhi, the stamp duty imposed by the government is Re. 1 for every Rs. 1000 of capital subscribed in the company.
The common seal is referred to the metallic seal generally to be affixed on bank documents or share certificates. The common seal is not compulsory, if mentioned so in the AOA.
Yes, the name of the Private Limited Company can be changed after filing the appropriate forms with the ROC.
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