The Companies Act, 2013 defines the company u/s 2(20) as : “Company” means company incorporated under this Act or under any previous law. The companies Act 2013 also allows for incorporation of different types of companies with varying level of liability for its shareholders and directors. Private Limited Company registration is the most popular legal entity option for new Businesses/Startup's in India. Private Limited Company has different identities according to its characteristics:
Company Limited by Shares :Liability of the Members is limited to the MoA to the level of the individuals specific share. Shareholder cannot be held liable to pay more that the value of his/her individual share capital invested in the company.
Company Limited by Guarantee :Liability of the members is limited to the amount of liability undertaken by each member in the MoA. This type of company structure is usually suitable for Clubs, Trade Associations, Societies etc
Company Registered under Section 8 of the Act :Such companies are usually incorporated for promoting Commerce, Art, Sports, Education, Research, Social Welfare Activities, Charity etc. Herein, Profits/Income (if any), is used only for furthering/promoting the cause of company establishment and profit/income/dividend (if any), cannot be shared/paid to its members. Out of the above, the Company Limited by Shares is the most popular form.
Limited Liability :Private Limited Company has a Flexible Structure. The Financial Liability in a Private Limited Company (Pvt Ltd Company) is Limited for each Shareholder (Owner). It is equivalent to the extent of capital investment of each Shareholder. This clause therefore ensures that your personal assets always remain protected in case of legal dispute etc. A Private Limited company can have a minimum of two directors. The directors of the Private Limited Company have limited liability to the creditors. In a case of default, banks / creditors can only sell company’s assets but not personal assets of directors.
Separation of Shareholders (Ownership) and Management :In a Pvt Ltd Company, it is possible to add/remove Directors, Advisors etc on company Board of Directors as an Independent Individuals without giving them share in your company.
Easy Equity Funding :
- Starting a Private Limited Company is an Ideal Solution for Startup companies who are looking for Funding and Growing/Scaling Up business in the medium to long term.
- This ensures the possibility for Private Limited Company to grow big and expand.
- Greater Capital Contribution and Greater Stability.
- Preferred by Banks, Venture Capitalists (VC's) and Investors.
- Start-ups and growing companies prefer private limited company as it allows outside funding to be raised easily, limits the liabilities of its shareholders and enables them to offer employee stock options to pull in top talent.
Flexible Structure :
- Easy to WindUp/Dissolve the Private Limited Company.
- Easy to Transfer Shares.
Initial Documents :Collect Requisite Information & Documents from you (client) via Pvt Ltd KYC Form.
DSC & DIN :Apply for Digital Signature (DSC) and Director Identification Number (DIN) of Proposed Director(s).
Name Approval :Preliminary Check for Company’s Name Availability and subsequent Name Approval Process.
MoA, AoA :After name approval, prepare MoA & AoA and other necessary incorporation documents.
Director Signatures :Get a signature on the required documents of proposed subscriber’s /directors.
CIN, PAN, TAN :File incorporation documents & obtain Certificate of Incorporation (CIN), PAN & TAN.
Process Completion :Finally, we will handover Company Incorporation Documents to you In-person/ via Speed Post.
- Copy of PAN Card of Director(s).
- Passport Size recent color photograph of Director(s).
- Copy of Aadhaar Card of Director(s).
- Copy of Voter ID of Director(s).
- Copy of Rent Agreement (if office is on rented property).
- Electricity/Water Bill (of Business Place)
- Copy of Property Ownership (of Business Place)
Minimum Requirements for Company Registration
- Minimum of Two Shareholders.
- Minimum of Two Directors (having DPIN)
- Minimum of 1 Lakh Share Capital
- Atleast One Designated Partner should be an Indian Resident
Company Name Selection
- The name of your company is very important. It reflects the Depth of Thought & Business Understanding/Clarity in the Line of Business.
- The company name should reflect the activity or the objective/purpose of setting up of Private Limited Company.
- The name of the company is usually the First Impression to company's Clients, Buyers, Suppliers, Stakeholders and most importantly the Employees. The company name should thereby be Business Relevant, Operationally Suggestive and Strategically Attractive.
- Various Factors which should be considered for company name include:
- Short, Concise and Simple
- Should not be Illegal/Offensive