A Private Limited Company (Pvt Ltd) is a privately held business entity registered under the Companies Act, 2013. It requires a minimum of two members and can have up to a maximum of 200 members. Additionally, the company name must include the words ‘Private Limited’ at the end.
Why Choose a Private Limited Company?
For foreign companies looking to establish operations in India, a Private Limited Company offers a flexible and less stringent compliance structure compared to a Public Limited Company. This makes it a preferred choice for startups and growing businesses.
Foreign Direct Investment (FDI) in India
Foreign investors can enter the Indian market through two main routes:
- Automatic Route – No prior approval is required from the Reserve Bank of India (RBI) or the Government.
- Government Route – Requires prior approval from the Indian Government, with conditions specified in the approval.
Benefits of Registering a Private Limited Company
1. Separate Legal Identity
A Private Limited Company is recognized as a distinct legal entity, separate from its owners and shareholders.
2. Perpetual Succession
The company continues to exist regardless of changes in shareholders or directors, including cases of death or insolvency.
3. Limited Liability Protection
The financial liability of each shareholder is limited to the unpaid value of their shares. Personal assets remain protected.
4. Easy Ownership Transfer
Shares can be transferred among shareholders, subject to the restriction that a Pvt Ltd company cannot have more than 200 members.
5. Access to Funding
While a Private Limited Company cannot raise funds from the public, it can secure financing from private investors, venture capitalists, banks, and other financial institutions.
Key Requirements for Registration
1. Unique Company Name
The chosen name must be distinct and should not be identical or similar to any existing company or Limited Liability Partnership (LLP).
2. Share Capital
Share capital in a Private Limited Company is classified as:
- Authorized Share Capital: Maximum capital a company is allowed to issue.
- Issued Share Capital: The portion of authorized capital issued to shareholders.
- Subscribed Share Capital: The portion of issued capital that investors have agreed to buy.
- Paid-up Share Capital: The amount actually received from shareholders.
There is no minimum paid-up capital requirement, but it is advisable to have sufficient funds for business operations.
3. Directors
- A minimum of two directors is required, with at least one director being a resident of India.
- Directors manage the company’s operations and make strategic decisions.
4. Subscribers
- Subscribers are the initial shareholders who agree to take shares in the company.
- There must be at least two subscribers, who can be either residents or non-residents.
- A subscriber can also be a director of the company.
5. Registered Office
Every company must have a registered office in India to receive official correspondence and legal notices.
Documents Required for Private Limited Company Registration
For Directors:
- PAN card (for Indian residents) or PAN declaration (for non-residents)
- Passport (for foreign directors)
- Identity proof (Voter ID/Driving License/Passport)
- Residential proof (Bank statement, Telephone/Mobile/Gas bill – not older than 2 months)
- Declaration in Form INC-9 (for first-time directors)
- Consent to act as a director
- Disclosure of interest in other entities
For Subscribers:
- PAN card (for Indian residents)
- Passport (for non-residents)
- Identity proof (Voter ID/Driving License/Passport)
- Residential proof (Bank statement, Telephone/Mobile/Gas bill – not older than 2 months)
For the Company:
- Sale deed/Property deed (if owned) or Lease deed (if rented)
- Latest utility bill (Electricity, Gas, Telephone – not older than 2 months)
- No Objection Certificate (NOC) from the property owner
- Memorandum of Association (MoA) and Articles of Association (AoA)
Note:
- Foreign directors and subscribers must have their documents notarized and apostilled.
- Documents in languages other than English must be translated and certified.
Additional Requirements for Corporate Subscribers
If a corporate entity is a subscriber to the Private Limited Company, the following additional documents are needed:
- Board resolution authorizing investment in the company
- Certificate of Incorporation of the subscribing entity
Why Choose CompaniesNext for Your Private Limited Company Registration?
At CompaniesNext, we provide a seamless online registration process with expert guidance. Our services include:
- Digital Signature Certificate (DSC) for directors and subscribers
- Director Identification Number (DIN) for two directors
- Company registration fees and stamp duty
- Certificate of Incorporation
- Company PAN and TAN registration
- EPFO and ESIC registration
- Professional Tax Registration (for Maharashtra-based companies)
- Bank account opening assistance
- Drafting of MoA and AoA
- Preparation of necessary declarations, consent letters, and other required documentation
With a dedicated team of professionals, we ensure accuracy, compliance, and timely completion of your Private Limited Company registration process.
Get started with your business today!
