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Elevate Your E-commerce Business: Benefits of Private Limited Company in India



Everyone must decide whether to create a private limited company (PLC) or another type of corporation when starting a business, namely one that involves online sales.

Converting your business to a PLC is without a doubt the wisest course of action. A PLC may register a number of distinctive business models.

When you begin your e-commerce organization, you may fully comprehend the benefits of a formal PLC registration procedure in Chennai India with the aid of this blog.

Definition of a PLC

PLCs are characterized as private corporations with limited liability in Section 2 (68) of the Companies Act, 2013. It does not readily transfer its shares to the public, in contrast to other public firms. PLC shareholders are not liable for the firm’s debts because the company owns all of its assets and liabilities.

Key Takeaways

Benefits and drawbacks of a PLC for e-commerce business in India

1. Boost the legitimacy of your company.

2. Safeguards the owners’ personal assets and protects them from dangers and damages.

3. The most alluring organizational structure for investors

4. High potential for rapid growth

5. Enables global performance

6. Perpetual existence

7. Ease of ownership transfer

8. Increases dependability and credibility

9. Draws in competent workers from the labor market

Overview of the e-commerce business in India

India’s digital economy, which is expected to be worth $1 trillion in US dollars by the year 2030, has grown as a result of e-commerce. India’s rapidly expanding e-commerce sector has benefited from the country’s increasing wealth, rapid growth in Internet users, and pervasive smartphone use. The market has grown quickly as a result of all three of these factors. The expansion of India’s e-commerce market has made it possible to access a number of previously inaccessible market niches.

Government initiatives to boost E-commerce 

The Indian government has launched a number of new initiatives since 2014, including Startup India, Skill India, Digital India, and the Innovation Fund. The timely and effective implementation of these projects is predicted to support the growth of e-commerce business in the nation. 

E-commerce future of India 

According to a survey by Bain & Company, social commerce in India is predicted to reach a gross merchandise value (GMV) of more than 2 billion US dollars by 2020. Analysts predict that due to the extensive usage of mobile technology, it will reach US$ 20 billion by 2025 and perhaps soar to US$ 70 billion by 2030.

Advantages of a PLC for e-commerce businesses in India

1) Limited liability protection for owners and shareholders

Personal assets may be at risk if a non-limited firm collapses, but not in the case of a limited corporation. Liability is indicated by the word “limited” in a limited corporation. In the event that your firm incurs debt, suffers losses, or is sued, this safeguards your personal assets.

A firm is a limited liability entity because the issue price of the shares that shareholders have purchased limits their liability.

Limited liability indicates that the company’s assets and liabilities are kept separate from the owners’ personal holdings and liabilities. So, in the event that a corporation declares bankruptcy, creditors may only pursue the assets of the firm, not those of the owners personally.

2) Separate legal entity status

A PLC works independently of its directors and shareholders as a separate legal entity; the corporation is a “person” in its own right. This indicates that the firm itself owns all of the company’s assets, obligations, and profits, and that the shareholders are not solely liable for the company’s debts.

3) Perpetual succession and stability

A PLC is a distinct legal entity with an endless succession. Meaning that the business would still be recognized by the law even if all of its members passed away or it went bankrupt.

4) Credibility and trust with customers and suppliers

Compared to other corporate arrangements, PLCs are viewed as being more reliable and trustworthy. When attempting to bring in new clients or raise capital, this may be crucial.

5) Tax benefits and financial advantages

  • Instead of paying a dividend, the gains can be passed on to the director as a salary to save on taxes.
  • In the case of a corporation, directors’ sitting fees can be deducted as an expense; in the case of an individual, they are exempt.
  • By paying your advance tax on time, you can avoid paying late fees on taxes that are paid at the end of the fiscal year.
  • You can deduct this expense and receive a tax break if one of your company’s directors or a family member is named as the registered office.
  • You must depreciate fixed assets for the duration of their useful lives, as stated on your balance sheet. So, we can profit from the tax advantages.
  • Family members offer free advice and assistance to enterprises. Their salaries can be included in the accounting books. Bring your earnings portion home with dual tax incentives to reduce your taxes.
  • A firm is eligible to deduct 100% of any non-cash contributions made to a political party or electoral trust for tax reasons.
  • Even if there is a change in shareholding by more than 49%, loss-making enterprises under insolvency are nevertheless permitted to carry on and set off their losses.

6) Ability to raise funds and attract investors

Other business formats do not have access to the same range of funding opportunities as PLCs do. Crowdfunding, venture capital, and even going public on the stock market are examples of this. Due to their limited liability status, PLCs are also more likely to be able to borrow money from banks.

Due to their tight compliance requirements, data accessibility on the website, and adherence to ROC standards, private limited firms enjoy greater trust from foreign investors. Also, if a PLC has at least one director who resides in India, a foreign businessperson may join as a director. Due to this, foreign investors prefer investing in private limited corporations over other business entities.

Compliance requirements and legal obligations

The most significant legal and compliance obligations of a PLC are as follows:

  • Income tax filing – Each business submits income tax (IT) returns and pays taxes on any profits during a specific fiscal year.
  • Annual ROC filing – A PLC’s annual returns to the ROC and audited financial statements are included in the ROC’s annual filing. Every business is required to file financial statements and submit annual returns in accordance with Sections 129 and 137 of the Companies Act, 2013, respectively. Within 30 to 60 days following the conclusion of the annual general meeting, you may file both documents.
  • Balance sheet and profit-and-loss statement – A PLC keeps track of the company’s assets and financial liabilities using a balance sheet and profit and loss statement. A balance sheet is a statement of the assets and liabilities of a corporation at a given time.

How to register a Pvt Ltd Company for an e-commerce business in India

Step-by-step process of registration

Below is a brief explanation of the steps required to register a Pvt Ltd Company online in India.

  • Asking for a director’s identity code (DIN)
  • Checking the availability of names and asking for names
  • Making ready and submitting the electronic articles of association (eAOA) and memorandum of association (eMOA) forms required to register a PLC.
  • Asking for the registered company’s permanent account number (PAN) and tax deduction and collection account number (TAN).
  • PAN and TAN will be included on the certificates of incorporation issued by ROC.
  • Opening a current account in the company’s name with a recognized bank
  • A three-year progress report and an overview of the present welfare, philanthropic, or social activities
  • Detailed information about the Board of Trustees
  • The real Memorandum of Agreement (MOA), registration certificate (RC), or trust deed

Pvt Ltd Company Registration in India

Required documents and fees

In Chennai, Tamil Nadu, the following documentation is required to register a business:

  • PAN cards for directors and shareholders
  • Passports must be up-to-date for foreign nationals.
  • Identification cards for shareholders and directors, such as an Aadhar card, a voter ID, a passport, or a driver’s license
  • Documentation proving the director’s residence, such as the most recent utility, bank, or phone bill
  • Most recent passport-size images of directors and shareholders
  • Evidence of the business address, such as the most recent electricity or phone bills at the registered office address
  • An NOC, or “no objection certificate,” must be given by the owner(s) of the registered office.
  • A rent agreement is necessary if the registered office is housed in rented space.

The MCA’s incorporation papers are as follows:

  1. Form INC-32, an application for business formation, submitted through SPICe+, the Simple Proforma for Electronic Business Incorporating.
  2. DSC 
  3. DIN

Additional documentation needed

  • Using Form DIR-2 to obtain permission to act as a director.
  • DIN application
  • A declaration of the DIN, if one is provided 
  • DSC application
  • Declaration of Subscribers on Form INC-9
  • MOA
  • AOA
  • A proof of registered office address
  • A letter of endorsement from the property owner
  • Evidence of identity and address for each director

According to the company’s authorized share capital, there are different filing costs for forms and other papers with the ROC. The charges for filing ROC forms like AOC-4 and MGT-7 are listed in the following table:

Declared share capital (in INR) Applicable fee (in INR)
Less than 1,00,000 200 per document
1,00,000 to 4,99,999 300 per document
5,00,000 to 24,99,999 400 per document
25,00,000 to 99,99,999 500 per document
1,00,00,000 or more 600 per document

The following are the ROC costs for ROC services:

Particulars Fees
File examination 100
Charge examination 100
The incorporation certificate 100
Additional certified copies 25 per page

Timeline and expected duration

It takes about 10 working days to complete the entire procedure, including the approval of the DIN, name, and incorporation. Today, however, the process of forming a company is quick because all necessary documents are included in a single MCA application form.

The MCA’s recent modifications have made it simple to register any type of company with the government. The process of registering your company properly can take anywhere between 10 and 15 days, assuming you have all the necessary paperwork in order.

Key considerations for choosing a company name

There are a number of considerations to make while deciding on a name for your company, as listed below.

Short and simpleThe name should be succinct and direct. The name of your company should be easy for people to say and remember from the first time they read about it or hear it.

MeaningfulYour company name needs to be connected to your business. It must go well with the company’s branding.

UniqueYour company name shouldn’t be identical to or confusingly similar to any brand or other existing entity.

SuffixThe name of your business should contain either “LLP” or “Private Ltd.” if it is an LLP or PLC.

Should not be illegal or offensiveThe law shouldn’t stop you from using your company name. It shouldn’t contravene any religion’s traditions or tenets or endanger them.

Role of directors and shareholders

The primary responsibility of company shareholders is to vote in their role as shareholders at general meetings to pass resolutions. This obligation is crucial because it gives the shareholders the ability to exert complete control over the business and its management.

The board of directors is in charge of managing the company’s operations; they determine the company’s strategic and operational goals and are in charge of making sure the company complies with all legal requirements.

Shareholders, who are frequently referred to as “members,” own the corporation by possessing its shares. The directors, on the other hand, are in charge of running the company. A shareholder does not automatically become a director, and vice versa, unless the bylaws so provide.

Obtaining necessary licenses and registrations

The requirements for getting business registrations in India are as follows:

  • The applicant must be older than 18.
  • The applicant should not have a criminal record.
  • The business must conduct legitimate operations.

The registration of a company and an LLP is governed by the Ministry of Corporate Affairs (MCA). A LLP, or limited liability company, registration is advised for business owners who intend to run a firm with an annual revenue of more than Rs. 20 lakhs. After being registered, a business or LLP will have a distinct legal identity, and the promoters will have limited liability protection. Also, the business would be easy to transfer, and the corporation would exist forever.

Challenges and drawbacks of a PLC for e-commerce business in India

Additional compliance requirements and costs

The list of PLC compliance deadlines for 2023 is as follows:

  • Beginning of business (within 180 days)
  • Appointment of an auditor (within 30 days)

IT return (need to be filed on or before 30th September of every year)

  • Quarterly advance tax payments
  • Submission of IT returns
  • Tax audit (required if a company’s gross receipts or turnover in the year before to the assessment year exceeded Rs. 1 crore).
  • Reporting of the tax audit

Form MCA AOC-4 (Failure to submit AOC-4 will result in a fine of Rs. 200 for each day of non-compliance or delay.)

Form MCA MGT-7 (Failure to file MGT-7 attracts a penalty of Rs. 200 per day of default or delay.)

DIN eKYC (Failure to submit DIN eKYC carries a 5000 rupee fine.)

Convene the annual general meeting

Report of the Director (The director is required to annually report information regarding his or her directorships in other corporations. Giving the corporation an annual written declaration is one way to accomplish this.)

Restriction on number of shareholders

A PLC-type corporation bans shareholders from publicly exchanging shares and limits the owner’s liability to their ownership interest. 

Members: In accordance with the 2013 Companies Act, you can establish a PLC with as few as two (and as many as 200) members.

Complexity of legal procedures

A PLC must comply with a number of legislative conditions in order to be incorporated in India. There are several steps that must be taken, such as designating directors and shareholders, acquiring a digital signature certificate (DSC) and DIN, reserving the company name, preparing the MOA and AOA of the company, and submitting the required paperwork to the ROC along with the associated expenses. For the purpose of obtaining a Certificate of Incorporation and establishing a legal company, it is crucial to accurately follow all the steps and adhere to the rules.


Summary of benefits and drawbacks of a PLC for e-commerce business in India

The benefits of a PLC are as follows:

1. Boost the legitimacy of your company.

2. Safeguards the owners’ personal assets and protects them from dangers and damages.

3. The most alluring organizational structure for investors

4. High potential for rapid growth

5. Enables global performance

6. Perpetual existence

7. Ease of ownership transfer

8. Increases dependability and credibility

9. Draws in competent workers from the labor market

In order to help you choose wisely when choosing a PLC as the legal structure for your company, we’ve listed below the PLC’s main drawbacks.

  1. Public release of firm information about MCA
  2. Higher costs of complying with the law
  3. Restricted owner control
  4. Share transfers are only permitted among current shareholders.

Final thoughts and recommendations for e-commerce entrepreneurs

According to data for 2019, online retail sales are predicted to make up 13.7% of all retail sales worldwide by the end of this year.

To beat out your rivals in business, you must put the following effective e-commerce techniques into practice as a fledgling entrepreneur:

  1. Come up with a catchy brand name, maintain brand consistency, and refrain from altering your domain name.
  2. A visually appealing layout for your store, an intuitive user interface, and information transparency
  3. Make your website SEO-friendly, employ pertinent keywords, and assess your clients’ mobile responsiveness.
  4. Ensure that your website is SEO-friendly, that your keywords are pertinent, and that your clients are mobile-responsive.
  5. Make the shopping experience more personalized by offering deals and discounts, making the customer’s job easier, and emphasizing customer satisfaction.
  6. Make a variety of payment options available, including online, third-party, and offline payments.
  7. Simplified checkout: single-page checkout, save list buttons, and third-party connectivity
  8. A one-page checkout process with third-party connectivity and the addition of save list buttons makes checkout simple.

With the numerous advantages of a pvt ltd company, you must first properly register your PLC in order to advance your online business.

However, if you need professional assistance to Pvt Ltd Company Registration in India, you may select, a company registration specialist situated in Chennai:

  • Govche India Pvt. Ltd.’s web platform,, is the best source for Indian business owners seeking company formation and compliance services. 
  • About 8,000 Indian business owners set up and ran their Pvt. Ltd. companies using

With, creating a PLC is straightforward and can be done online in three easy steps:

  • They can help you with the MCA requirement that all businesses have registered directors.
  • Choose a name for your business. (Use our database to search for a firm name, or contact us for assistance.)
  • Kanakkupillai experts draft and submit the MOA and AOA paperwork necessary for your company to be registered.

We’re sure that anyone who is interested in learning more about the private limited company registration procedure in order to use it as a launchpad to grow their E-commerce business in Chennai would find it valuable based on what we’ve covered thus far.


Kanakkupillai is your reliable partner for every step of your business journey in India. We offer reasonable and expert assistance to ensure legal compliance, covering business registration, tax compliance, accounting and bookkeeping, and intellectual property protection. Let us help you navigate the complex legal and regulatory requirements so you can focus on growing your business. Contact us today to learn more.