What is a Private Limited Company in India?
A private limited company( in India ) is a type of business entity that is registered under the Companies Act, 2013. It is a company that is limited by shares, which means that the liability of its members is limited to the amount of money they have invested in the company. Read mor…
Private limited companies are the most common type of business entity in India. They are popular because they offer a number of advantages, including:
Limited by shares: The responsibility of the individuals is restricted to the sum neglected to the organization concerning the offers held by them.
Limited by guarantee: Here the individuals' liabilities are restricted to how much cash they assurance to pay in the event that the organization is twisted u
Unlimited liability: The responsibility of individuals is limitless in this kind of privately owned business. Individual resources of individuals can be connected and sold when the organization is being twisted up.
Key features of a private limited company in India
The key features of a private limited company in India are as follows:
- Limited liability: The liability of the members of a private limited company is limited to the amount of money they have invested in the company.
- Minimum number of members: A private limited company must have at least two members.
- Maximum number of members: A private limited company can have a maximum of 200 members.
- Share capital: A private limited company must have a minimum paid-up share capital of ₹1,00,000.
- Audit: A private limited company with a turnover of ₹2 crores or more in the previous financial year is required to have its accounts audited by a qualified auditor.
Documents required to form a private limited company in India
The following documents are required to form a private limited company in India:
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For Director/Shareholders
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Self-attested Pan card
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Self-attested Voter id or Driving license or Passport
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Self-attested Bank statement or electricity/telephone/mobile bill
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Recent passport-size photo
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For the Registered address of the company
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If the premise is rented/leased
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Copy of the Electricity bill of the owner
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Rent or lease agreement
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NOC from the owner of the property
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REGISTRATION Process to form a private limited company in India
The process to form a private limited company in India is as follows:
- Name Reservation
- Procurement of Digital signatures
- Preparation of Incorporation documents
- Drafting of MOA/AOA
- Filling of Incorporation documents with MCA
- Filling of Registered office
- Filing of commencement of Business after Incorporation
- Issue of Share certificate to shareholders
Conclusion
Private limited companies are a popular choice for businesses in India. They offer a number of advantages, including limited liability, tax benefits, and ease of formation. If you are considering starting a business in India, a private limited company may be the right choice for you. Read more
FAQs
What are the benefits of forming a private limited company in India?
- Limited liability: The liability of the members of a private limited company is limited to the amount of money they have invested in the company. This means that if the company goes bankrupt, the members' personal assets are not at risk.
- Tax reductions: Confidential restricted organizations are liable to bring down charges than different kinds of business substances.
- Ease of formation: The process of forming a private limited company is relatively simple and straightforward.
What are the disadvantages of forming a private limited company in India?
- Cost: The cost of forming a private limited company in India can be significant.
- Regulation: Private limited companies are subject to a number of regulations, which can be time-consuming and burdensome.
How do I form a private limited company in India?
The process of forming a private limited company in India is as follows:
- Draft the memorandum of association and articles of association. These documents set out the basic rules and regulations of the company.
- File the incorporation form with the Registrar of Companies. This form is available online or at the Registrar's office.
- Pay the registration fee. The registration fee is ₹1,00,000 for a private limited company.
- Obtain a certificate of incorporation from the Registrar of Companies. This declaration is evidence that the organization has been enlisted.
- Open a financial balance for the sake of the organization.This is necessary for the company to conduct business.
- Issue share certificates to the shareholders. These certificates provide evidence of ownership of shares in the company.