Private Limited Company

how to start Private Limited Company

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Incorporate your company at zero service charge

* Only government fees apply

An overview

Private limited structure of an entity is highly preferred over proprietorship concern in India due to following reason:

Your personal assets and liabilities are segregated from your business assets and liabilities.
Nationwide recognition is available.
Owners and management are differentiated.
Bankers and other lenders (venture capitalist / private equity funds) prefer to lend to registered private company rather than an proprietorship concern.

Minimum requirement to start your private limited

AS per companies act requirement to start private limited company following things needs to be taken care of;

Minimum 2 shareholders (owners of company)
Minimum 2 directors (shareholder can also be a director)
Registered office for company which shall need not be commercial space even any shareholder residential address can be considered.
Minimum authorized capital is Rs 1,00,000/- however no threshold in paid up capital.
Digital signature certificate (DSC) needs to be obtained for directors.

DSC – Briefed up:

In todays world e document overruled the paper document hence there aroused the need to sign those e paper online which laid the path for DSC.

DSC is like a pen drive (token pass) issued by certification agencies who are appointed by the office of the Controller of Certification Agencies (CCA) under the provisions of IT Act, 2000.

There are in total 8 certification agencies and most prominent player in this market are E-Mudhra and NSDL.

As per companies act, all legal documents starting from SPICE + application till insolvency / winddown application requires to be digitally signed.

Steps to register your private limited company

Keeping in view the ease of doing business, company can now be registered online by filing one form called SPICE + (Simplified Proforma for Incorporating Company electronically Plus)

This SPICE + form enables you to obtain other legal registration at one place, which are as follows:

Reserve your company name – ensure it has to be unique (please remember your company name can always be different from your brand / trademark name)
Director Identification number – for all of your first directors
GST / PAN / TAN / EPFO / ESI registration.
Opening of Bank account.

Following documents are required to be attached along with application

Electronic Memorandum of Association (E-MOA)*
Electronic Articles of Association (E-AOA)*
Copy of utility bills
Proof of office address
Proof of identity as well as the residential address of subscribers

*E-MOA is bundle of document which contain six clauses through which outsiders gets to know about the status of company and creates legal relationship with outside world

*E-AOA is again a bundle of documents which contain several clauses that defines the rules and regulation for the administration of the company which creates relationship between a company and its shareholders.

Do not worry much about this technicality we are here to cut off this burden and helps you to concentrate on your dream business venture.

Pros	Cons
Separate legal entity means in eyes of law and public company is observed as natural person like you and me	Separate legal entity means in eyes of law and public company is observed as natural person like you and me
Limited liability means irrespective of quantum of outstanding debts, company liability is restricted to its net worth	Cannot issue prospectus to general public in simple terms company cannot access primary market for raising funds
No minimum capital requirement	Legal compliance cost including book keeping activity may anywhere hover around Rs 40K to 50K per annum
Perpetual succession that is continued or uninterrupted existence until it is legally dissolved