Founding a private limited company is one of the most attractive options for entrepreneurs in India. This is due to a number of factors, including limited liability, the company’s separate legal standing, and last but not least, better credibility. Here’s a simple step-by-step guide to help you understand the registration process for a private limited company.
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Step 1: Select a Company Name
The first step is to pick a unique and meaningful name for your company. It is essential to ensure that the name chosen is not an exact duplicate of any existing registered company or trademark. You can check the availability of your desired company name using our Company Name Search tool. Also, follow the naming guidelines given by the Ministry of Corporate Affairs (MCA) to ensure compliance.
Step 2: Avail Digital Signature Certificates (DSC)
As company registration is an online process, the directors and shareholders are required to have Digital Signature Certificates (DSC). The DSC is a crucial component that is utilized in the digital signing of vital documents during registration
Step 3: Obtain a Director Identification Number
A Director Identification Number (DIN) is an exclusive number provided to every company director. You can obtain the DIN as you file the SPICe+ form which is discussed in the next part. The system of DIN authenticates the director’s identity securely.
Step 4: File the SPICe+ Form
The SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form is referred to for the incorporation of a company. This is a single window integrated form for the following services:
- Named Reservation
- Incorporation of a Company
- Application of PAN and TAN, and
- Registration of GST.
The filing of this form can be done only by uploading necessary documents such as the Memorandum of Association (MoA) which contains the company’s objectives, Articles of Association (AoA) which gives the company’s rules and regulations, proof of office address, and identity and address proof of directors and shareholders.
Step 5: Pay the Registration Fees
Once you have filled out the SPICe+ form, you will have to pay the prescribed government fees and stamp duty. The cost of the registration may differ due to the authorized capital and the location of the registration state.
Step 6: Verification and Approval
After the information and documents are submitted, the MCA will check them for accuracy. In case everything is all right, they will initiate the registration process and give the Certificate of Incorporation (COI).
Step 7: PAN, TAN, and Bank Account
After the registration, the company will obtain its own PAN, and TAN numbers which are Permanent Account Number and Tax Deduction and Collection Account Numbers. They should also open a business bank account to handle the company’s financial transactions.
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Some of the Mandatory Documents
Here are some of the key documents you will need during the registration process:
- A PAN card, Aadhaar card, or passport with address proof and a passport-size photograph are the documents that you will need to submit for the registration of Directors and Shareholders.
- The registered office address proof needs to be submitted as a rental agreement or property ownership documents along with a utility bill (not older than two months).
Benefits of a Private Limited Company
A private limited company comes with a few advantages. One of them is the shareholders having limited liability. This means they are liable only for their share of the investment. The company is separate as a legal entity, so it can own assets and make contracts in its name only. Receiving funds from venture capitalists and angel investors are also easier for private limited companies. Also, a company retains its existence if shareholders and directors change, thereby guaranteeing permanent existence.
Conclusion
Starting a private limited company might look difficult initially, but when you do the steps that we are going to mention here, you will see that the process becomes very simple. By taking care of the filing aspects and being on the right side of the law, you can smoothly create a private limited company and take advantage of a well-structured business entity.For a detailed guideline about how to register your private limited company, please check this link: https://myhq.in/guides/company-registration-in-india
