Private Limited companies are the most popular format of business in India in between startups and small enterprises. Private limited company registration has many benefits and it is the best way to start the business in comparison to sole proprietorship and partnership firms. The company registered with the Ministry of Corporate Affairs through the Registrar of Companies (ROC), this is the main reason why the private limited is more popular than any other business entity as it is regulated by proper authority and this is why it attracts investors. Minimum 2 persons are required to start the private limited company without any minimum capital requirement which means anyone can start the company with any capital.
The best part of this company is that there is limited liability of the directors and shareholders which makes directors and shareholders safe and secure, and not become personally liable for any debt or loss incurred by the company itself. The company has its own identity as it has a separate legal entity feature due to which it enjoys the rights like a person and can have properties on its name, properties include trademark registration, copyright, patent, etc. Maximum 15 people can be the director in the company and 200 shareholders during the life of the company. After getting registered the company has to do certain compliances every year to avoid penalties and other consequences, these compliances are also called Annual Compliance for Private Limited Company . These compliances are very important to maintain the active status.
Private Limited Company Registration Process
Step 1 - Apply Name Reservation Form
The very initial step of the company registration is to reserve the name for which the name reservation application shall be made. In one application two names can be applied at a time and one re-submission is allowed. If the name is approved it is valid for 20 days only and if the procedure is not completed in these days, then the name will get expired.
Step 2 - Apply For Digital Signature Certificate
Digital Signatures are a very important part of the registration procedure as the forms cannot be signed without DSC and the registrar will accept the forms only if it is signed by the DSC. DSC is equivalent to the physical signature and has validity like a physical signature. Nowadays almost all government forms are signed through DSC only.
Step 3 - Preparation & Singing of Documents
After the name gets approved there are certain documents that shall be prepared and the same shall be signed by the directors and shareholders of the company.
Step 4 - Submission of Final Form
After completion of starting steps the final form shall be prepared and all the relevant documents shall be attached in the form and then needs to sign it and submit it to the registrar online through the MCA website
Step 5 - Issuance of Certificate of Incorporation
If the registrar is satisfied with the application, then he will grant the certificate of Incorporation along with that they will issue PAN, TAN and DIN of the directors.
After registration, the company has to open the bank account and deposit the paid-up capital amount, and auditor appointment within 30 days from the incorporation. As well as the company has to do certain other compliances from time to time to avoid penalties and gain the trust of investors and other stakeholders.
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