Private limited company is a perfect start for anyone who wants to start their business to give it a separate legal identity. Private limited company can be formed with ease and its procedural compliance are also easy when compared to that of a public company.
A private limited company can be started off with just two members who will be the shareholders and directors.
Companies enjoy better avenues for borrowing of funds when compared to other forms of business such as sole proprietorship and partnership.
A company enjoys separate legal identity unlike partnership firms.
Minimum capital required to incorporate a private limited company is one lakh.
Personal assets of the shareholders will not be at risk, in the event of the company facing financial distress. Liability of the shareholder is limited to the unpaid amount on his shareholding.
A company enjoys perpetual existence unlike other forms of business i.e.,the company continues to exist irrespective of the status of the owner.
A private limited company cannot raise funds from public in the form of share capital.
The shares in a private limited company cannot be sold or transferred to anyone else without the agreement of other shareholders.
A private limited company can have maximum of 200 shareholders which restricts the scope of expansion and growth of the company.
Procedure for Registration
With the introduction of form INC29, establishing a company is much easier and less time consuming.
Any person above 18 years can become a director. Non-residents can also become director of Indian companies.
A private limited company must have a minimum of 2 directors while the maximum no. of directors can be upto 15.
ID proof and residence proof of all the proposed directors, PAN card is mandatory for Indian nationals. No objection certificate from the owner of registered office or lease agreement must be produced.
Company’s proposed name should be unique i.e., it should not be identical to any existing name. Names that infringe others’ rights, trademarks or patents are likely to be rejected by ROC
Digital signature is process to authenticate and validate records electronically. DSC is required for every director of the company as the Ministry of Corporate Affairs (MCA) mandates digital signature of directors on some documents.
DIN is a unique identification number which is allotted to all the directors existing or proposed. DIN can be obtained by filing e-form DIN1 in MCA portal.
Authorized capital of a Company is the amount of shares a company can issue to its shareholders. Companies have to pay authorized capital fee to the government so as to be able to issue shares. Companies have to pay authorized capital fee for a minimum of Rs.1 lakh.
Every private limited company must hold a board meeting atleast once in every three months and an Annual general meeting (AGM) every year.
Yes, a foreign national can become director of a private limited company. Atleast one director in a company should be resident Indian.
Yes, NRIs / Foreign Nationals / Foreign Companies can hold shares of a Private Limited Company subject to Foreign Direct Investment (FDI) Guidelines.
Yes, a partnership firm can be converted into private limited company by following the procedure laid down in Companies Act 2013.
Yes, Companies Act 2013 provides rules for converting a private limited company into a public limited company.
Two director DSC,DIN,name approval,ROC fees,PAN,TAN,MOA,AOA,5 set of books.
Two director DSC,DIN,name approval,ROC fees,PAN,TAN,MOA,AOA,5 set of books with service tax registration.
Two director DSC,DIN,name approval,ROC fees,PAN,TAN,MOA,AOA,5 set of books with service tax registration, MSME Registration.
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