The registration of Private Limited Companies in India is done through the MCA portal by furnishing the required documents and by filling out the appropriate forms. If the RoC finds the same to be in line with the Companies Act, 2013 and devoid of any discrepancies, the Certification of Incorporation is awarded.

The registration of Private Limited Companies in India is done through the MCA portal by furnishing the required documents and by filling out the appropriate forms. If the RoC finds the same to be in line with the Companies Act, 2013 and devoid of any discrepancies, the Certification of Incorporation is awarded.

A Private Limited Company is one of the prime options for entrepreneurs to evolve their business. Amongst various corporate entities, a Private Limited Company gets the most visibility and recognition from the clients. This, in turn, boosts the customer base undeniably. Therefore, most start-up ventures choose a pvt limited company to launch their operations with their eyes closed.

Definition of Private Limited Company 

A pvt company is a business structure designed for smaller groups. Here’s a breakdown of its key features:

• Limited Liability: Similar to a public company, shareholders in a pvt limited company only have financial responsibility up to the amount they invest in the company. This means their personal assets are protected if the company faces financial difficulties.
• Restricted Shares: Unlike publicly traded companies, private limited companies cannot freely offer their shares to the general public. Ownership is restricted to a select group of members, typically friends, family, or a small group of investors.
• Member Limits: pvt limited companies, with some exceptions, are capped at a maximum of 200 members (shareholders). This allows for a more manageable structure and decision-making process.

Characteristics of a Private Limited Company 

pvt limited companies are a popular business structure in India, offering a balance between flexibility and legal protection. Here’s a look at their defining characteristics:

• Limited Liability Shield: Shareholders enjoy limited liability, meaning their personal assets are safe even if the company faces debts. They’re only liable up to the amount they invested in the company.
• Separate Legal Identity: A private limited company is a distinct legal entity from its owners. It can own property, make contracts, and even sue or be sued in its own name.
• A Small Circle of Shareholders: Unlike publicly traded companies, private limited companies have a restricted group of shareholders, typically capped at 200. This allows for a closer-knit ownership structure and easier decision-making.
• Minimum Two Directors: At least two directors are required to manage the company, with at least one being a resident Indian citizen.
• Minimum Capital Requirement: A minimum paid-up capital of ₹ 1 lakh (or a higher amount as mandated) is necessary to register a private limited company.
• Restricted Share Transfer: Transferring shares in a private limited company is not as straightforward as in public companies. It usually requires approval from the Board of Directors or following specific guidelines set out in the company’s Articles of Association.
• No Public Fundraising: Private limited companies cannot raise funds by inviting the general public to subscribe to their shares or debentures.
• Compliance Obligations: Just like any registered business, private limited companies must adhere to various regulations. This includes maintaining proper financial records, holding annual meetings, and filing annual returns with the Registrar of Companies.

Advantages of Private Limited Companies

1. A pvt limited company is a separate legal entity and possesses a personality of its own. The company can enter contracts by itself and hold a bank account in its name
2. The company, being a legal person, can sue and be sued by third parties. Also, in case of any legal hassles pertaining to the company, the members of the company cannot be held liable for the same
3. A pvt limited company is under no obligation to reveal its annual reports or other documents to the public.

Disadvantages of Private Limited Companies

1. The company’s shares are not transferable to the public. This might result in a situation where the company might get stuck without growing further
2. Raising funds and having financial aid approved are quite a challenge in the case of private limited companies
3. In times of financial crisis, the shareholders of a private company are at a higher risk, as the company is completely dependent on them.

Basic Requirements for Registration of Private Limited Companies

1. The company should have a minimum of 2 and a maximum of 200 members. There should be a minimum of 2 directors and the company can have a maximum of 15 directors
2. The Directors should possess a Director Identification Number (DIN), which is given by the MCA.  At least one of the directors must be a resident of India, which means that the designated Director must have been staying in India for at least 182 days in the preceding calendar year
3. The name of the company should be approved by the Registrar of Companies (RoC). For this purpose, about 5-6 names should be submitted for the RoC’s perusal. The name shall be unique and should not have a resemblance to the name of any other existing companies or Trademarks. The name should have the words “private limited” attached to the end, for instance, ABC Hotels Private Limited
4. The address of the registered office must be submitted. Prior to the registration, the temporary address must be provided for the purpose of communication. Once the registration is accomplished, the address is designated as the permanent address. All official documents of the company shall be placed at the office at the registered address. The main business affairs of the company take place at the registered office
5. A Digital Signature Certificate (DSC) is incumbent to authorize the transactions done online. The Directors of the company are required to hold a valid DSC.

Documents Required for Registration of a Private Limited Company

The following documents are required in order

1. Identity Proof such as PAN card, Aadhar card, or a valid Indian Passport of all the directors and shareholders are to be submitted.
2. Passport size photograph of the directors and shareholders is to be furnished
3. Proof of Address such as the most recent telephone bills, electricity bills, bank statements of the directors and shareholders are to be presented
4. When the registered office is in rented space, the rental agreement and NOC from the owner are required. Further, in the case of the own property of the company, the sale deed is to be furnished
5. DSC is mandatory for all the Directors and has to be present in an application for registration.

The Process to Register a Company in India

Below given are the steps for company registration online India:

• Step 1:

The appropriate forms in the MCA portal are to be filled and duly signed using the respective Digital Signatures.

• Step 2:

The DIN (Director Identification Number) of the respective director, along with name and other details have to be filled in the registration form.

• Step 3:

The SPICe+ form has to be filled out and duly submitted in the MCA portal. Prior to this, the director has to get registered in the MCA portal, after which access can be obtained to fill the required e-forms.

• Step 4:

Once all the required forms are filled and documents are submitted, the Registrar examines the same. On being satisfied, the Certificate of Incorporation along with TAN and PAN are awarded. After the registration is accomplished, a bank account in the name of the company has to be begun in order to carry out the financial dealings of the company.

Thus, the registration of a private limited company is one of the first steps that a business has to take. The registration would bestow a legal personality on the company, which otherwise would not happen. Registering the company would also enable the business to avoid legal issues which might arise in the future. Thus, regardless of how convoluted the process of registration is, getting it done is of utmost importance to private limited companies.