Company IncorporationPrivate Limited

How to Incorporate a Private Limited Company

Private Limited Company, being the most preferred corporate entity encompasses a series of steps to get registered. The required legal documents are to be submitted to the Registrar of Companies (RoC), and on verifying the same, the Certificate of Incorporation is issued.

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Good things never come easy and so is this setting up a successful business. An entrepreneur’s mind is always programmed to bring out the best in his business, right from the name of the business to the clients the business deals with. Likewise, the type of corporate entity to be chosen is one of the major decisions a business could ever deal with. There have also been instances wherein the companies change from one entity to another during the course of the business. For instance, a number of businesses change from sole proprietorship to private limited company or partnership company.

While there are a number of business entities like the sole proprietorship, partnership, LLP (Limited Liability Partnership), the private limited company has been the most preferred and the most conventional type of entity preferred by the businesses.

Advantages of Private Limited Company:

Businesses that intend to grow quickly and expand across, prefer private limited companies as it offers a wide range of advantages over the other entities like:

  • A private limited company is a separate legal entity and is different from its members. The company can purchase property of its own and can sue and be sued in its own legal capacity
  • A company has perpetual succession and lives on forever unless it is legally dissolved.
  • A private limited company exhibits limited liability wherein the members of the company are accountable for the debts only to the extent of shares they hold.
  • The shares held by the shareholder are easily transferable to another person.
  • A private company is relatively in a better position to seek funds from banks and financial institutions as compared to other corporate entities.


Requisites for the Registration of a Private Company:

  • A private limited company must have a minimum of 2 and a maximum of 200 shareholders.
  • There should be a minimum of 2 directors and there can be a maximum of 15 directors.
  • In the case of a private limited company, there are no mandatory requirements for minimum paid-up capital
  • The directors and shareholders have to furnish their proofs of identity with government authorized identity cards such as PAN (Permanent Account Number) card or Aadhar card
  • The proof of address such as telephone bills, electricity bills that are not older than two months from the date of submission is to be presented.
  • Address proof of the registered office such as water bills, electricity bills to be submitted
  • If the office is situated on a rental space, a NOC from the owner and the rental agreement is to be submitted
  • If the office is spaced out in its own property, the property deed is to be enclosed.

Procedure to Incorporate a Private Company:

The steps to incorporate a private limited company are as follows:

Step 1

Obtaining the Digital Signature Certificate (DSC)

The directors and shareholders are required to obtain the DSC. Ever since the process of registration went online, the DSC has become inevitable as the forms are required to be signed digitally and uploaded on the MCA (Ministry of Corporate Affairs) portal.

Step 2

Obtaining DIN (Director Identification Number) for the Directors

The DIN is a unique 8-digit number allotted to the directors by the MCA. Every director in the company is supposed to hold a DIN.

Step 3

Name of the Company

The name of the company is the most important aspect of the business as it stays with the business for eternity. The application for the same has to be made through the form INC-1 where the form allows the applicant to come up with about 5-6 names listed in the order of preference. Care has to be taken while selecting the name, as it should not bear similarity to the names of the existing companies or trademarks.

The name thus applied for is kept reserved for the applicant for a duration of 60 days, within which the applicant has to complete the registration of the company.

Step 4

Certificate of Incorporation

After having completed the above formalities, an application for the certificate of incorporation can be made using the SPICe (Simplified Proforma for Incorporating a Company Electronically) form, along with the forms for the MoA (Memorandum of Association) and AoA( Articles of Association).  After verifying the documents and the forms thus submitted, the RoC (Registrar of Companies) issues the Certificate of Incorporation along with the PAN (Permanent Account Number) and TAN (Tax Deduction Number).

Further, after having received the Certificate of Incorporation, an account in the name of the company has to be set up in an authorized bank to carry out the financial transactions of the company.

Thus, the first and foremost step in a business is to incorporate a company, thereby giving it legal recognition. This would undoubtedly bestow the company with credibility and goodwill. Although the procedure involved in registering a company looks tedious, getting in touch with our experts for registering the company can make the process much more bearable. Here at VakilSearch we totally understand how important the business is to an entrepreneur and handle the registration services with high precision and complete it at the earliest.  

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