Private limited company

Private limited company Registration

Registering a Private Limited Company (Pvt Ltd) involves several legal and procedural steps. The process varies by country, but here’s a general guide:

Steps to Register a Private Limited Company

1. Choose a Unique Company Name

• Ensure the name is unique and not similar to any existing business.
• Check name availability with the relevant government authority (e.g., MCA in India).

2. Register Directors & Shareholders

• A Pvt Ltd company must have at least two directors and two shareholders (can be the same person).
• Directors need to provide identification documents (passport, Aadhaar, etc.).

3. Draft & File Incorporation Documents

• Memorandum of Association (MoA) – Defines the company’s objectives.
• Articles of Association (AoA) – Specifies internal rules and regulations.
• File with the company registration authority (e.g., Ministry of Corporate Affairs (MCA) in India).

4. Obtain Certificate of Incorporation

• After document verification, the authority issues a Certificate of Incorporation with the company registration number.

5. Apply for PAN, TAN, and Other Tax Registrations

• Obtain a Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) (India-specific).

6. Open a Business Bank Account

• Use the Certificate of Incorporation and tax documents to open a corporate bank account.

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Overview

Private limited company Registration in India

FAQ

Frequently asked questions.

Key Features of a Private Limited Company

• Limited Liability Protection – Shareholders are liable only up to the amount they invest.

• Separate Legal Entity – The company has a distinct identity from its owners.

• Perpetual Succession – The company continues to exist even if directors or shareholders change.

• Easy Fundraising – Private equity investors and venture capitalists prefer Pvt Ltd companies.

• Ownership Restrictions – Shares cannot be freely traded on the stock exchange.

Eligibility Criteria

• Minimum Directors: 2 (Maximum: 15)

• Minimum Shareholders: 2 (Maximum: 200)

• Resident Director: At least one director must be an Indian resident.

• Registered Office: A physical address in India is mandatory.

Documents Required for Registration

For Directors & Shareholders:

• PAN Card (mandatory for Indian citizens)

• Aadhaar Card/Voter ID/Passport

• Passport-size photograph

• Address proof (Bank statement, Utility bill, or Rent agreement)

For Registered Office:

• Rental agreement (if rented)

• Utility bill (not older than 2 months)

• NOC (No Objection Certificate) from the property owner

Advantages of a Private Limited Company

• Enhanced brand credibility and trust

• Easier fundraising from investors

• Limited liability ensures personal asset protection

• Business continuity despite changes in ownership

Disadvantages of a Private Limited Company

• Compliance Burden: Requires annual filings and record-keeping.

• Ownership Restrictions: Cannot publicly trade shares.

• Higher Setup & Maintenance Costs compared to sole proprietorships or partnerships.