Establishing a Private Limited Company (Pvt Ltd) in India has become more streamlined with the digitization of the company registration process. This guide outlines the step-by-step procedure for online company incorporation, ensuring compliance with legal requirements and a smooth registration experience.
1. Understanding Private Limited Company Registration
A Private Limited Company is a popular business structure in India, offering limited liability to its shareholders and a separate legal identity. This structure is ideal for small to medium-sized enterprises aiming for growth and credibility. The registration process has been simplified through online platforms, making it more accessible to entrepreneurs.
2. Prerequisites for Company Incorporation
Before initiating the online registration process, the following prerequisites must be met:
Minimum Number of Directors and Shareholders: A minimum of two directors and two shareholders are required. The same individuals can serve as both directors and shareholders.
Resident Director: At least one director must be an Indian resident, having stayed in India for a total period of not less than 182 days in the previous calendar year.
Unique Company Name: The proposed company name should be unique and not similar to any existing company or trademark.
3. Steps for Online Company Registration in India
The online company registration process involves several key steps:
a. Obtain Digital Signature Certificate (DSC):
Since the registration process is online, digital signatures are required for filing forms on the Ministry of Corporate Affairs (MCA) portal. All proposed directors and shareholders must obtain a DSC from authorized certifying agencies. The cost of obtaining DSC varies depending upon the certifying authority.
b. Apply for Director Identification Number (DIN):
DIN is a unique identification number for directors. It can be obtained by filing the SPICe+ (Simplified Proforma for Incorporating Company Electronically) form during the company registration process. One DIN is enough to be a director in any number of companies.
c. Name Reservation using SPICe+ Part A:
Reserve the company name by submitting Part A of the SPICe+ form. Provide up to two proposed names, ensuring they are unique and comply with the naming guidelines. The MCA checks availability and approves if the criteria are met.
d. Fill SPICe+ Part B for Company Incorporation:
After name approval, proceed with Part B of the SPICe+ form, which includes details such as:
Registered office address
Director and shareholder information
Capital structure
Attachments like Memorandum of Association (MOA) and Articles of Association (AOA)
The SPICe+ form also facilitates the application for PAN and TAN for the company.
e. Filing e-MOA and e-AOA:
The MOA and AOA outline the company's objectives and internal rules. These documents must be filed electronically with the SPICe+ form. Drafting and submitting the MoA and AoA, which outline the company's object and internal rules and byelaws, respectively, is a crucial step in the incorporation process.
f. Apply for PAN and TAN:
Through the SPICe+ form, simultaneously apply for the company's Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). These applications are part of the SPICe+ form but issued by separate authorities.
g. Submission and Payment of Fees:
Once all forms are duly filled and documents attached, submit them on the MCA portal and pay the requisite fees. The fees may vary depending on the authorized capital and state of incorporation.
h. Certificate of Incorporation:
Upon verification, the Registrar of Companies (ROC) issues the Certificate of Incorporation, which includes the Corporate Identity Number (CIN), signifying the company's legal existence. The ROC reviews the SPICe+ form, and if complete and accurate, issues the Certificate of Incorporation.
4. Post-Incorporation Compliance
After incorporation, ensure the following compliances:
Commencement of Business: File a declaration for the commencement of business within 180 days of incorporation.
Opening a Bank Account: Open a current account in the company's name for financial transactions.
Statutory Registers: Maintain necessary statutory registers and records at the registered office.
Tax Registrations: Obtain Goods and Services Tax (GST) registration if applicable.
5. Checking Company Registration Status
To verify the status of your company's registration:
Visit the MCA portal.
Navigate to the 'MCA Services' tab and select 'View Company/LLP Master Data'.
Enter the company name or CIN to access registration details.
6. Benefits of Private Limited Company Registration
Registering as a Private Limited Company offers several advantages:
Limited Liability: Shareholders' personal assets are protected from the company's liabilities.
Separate Legal Entity: The company is distinct from its owners, allowing it to own property and enter into contracts.
Ease of Raising Capital: Attracts investors due to structured governance and limited liability.
Perpetual Succession: The company's existence is unaffected by changes in ownership or management.
7. Conclusion
