What is Private Limited Company ?
A type of company that offers limited liability or legal protection for its shareholders but that places certain restrictions on its ownership. These restrictions are defined in the company’s bylaws or regulations and are meant to prevent any hostile takeover attempt.
2 Digital Signature Certificates
2 Director Identification Numbers
1 Name Approval Application
Stamp duty on INR 1 Lakh Authorized Capital
Company Incorporation using SPICe+
MOA & AOA
2 Share Certificate
Appointment of 1st Auditor
Easy Transferability –
As the owner of a company is represented by shares, the ownership of a company can be transferred to any other legal entity or person in India or abroad easily – in part or whole.
A private limited company provides limited liability protection to its shareholders. In case of any unforeseen liabilities, it would be limited to the company and not impact the shareholders.
A company can raise equity capital from persons or entities interested in becoming a shareholder. Entrepreneurs can raise money from angel investors, venture capital firms, private equity firms, and hedge funds.
Separate Legal Entity-
A private limited company is recognized as a separate entity legally with perpetual existence. It can have a PAN number, bank accounts, licenses, approvals, contracts, assets, and liabilities in its unique name.
The major ownership restrictions are:
- shareholders cannot sell or transfer their shares without offering them first to other shareholders for purchase,
- shareholders cannot offer their shares to the general public over a stock exchange, and the number of shareholders cannot exceed a fixed figure
- Settle My Tax ensures the registration of a Private limited company to be completed within just 10 days in any part of India.
How to Register a Company in India?
Registering a company in India is now simple:
- Name Approval
- A Digital Signature Certificate (DSC) — is the digital signature of the owners of the company is valid for 2 years.
- A Director Identification Number (DIN)— DIN is valid for a lifetime and cannot be changed
- Spice Form (Spice Part B, Agile, E MOA, and E AOA)— Spice Form is an enormously detailed form that covers all the personal details like, address of the proposed company, the object of the company, etc.
- Registration on the MCA Portal or New user registration
- Certificate of Incorporation —- post-approval, the Registrar of Companies (RoC) assigns a company with a 21 digit Corporate Identity Number (CIN).
Documents required for Company Registration
In India, Registration of a Private Limited Company cannot be done without proper proof of identity and proof of address. Proof of identification and address would be required for the incorporation of all the company’s directors and shareholders.
The organization must have a registered office for business registration in India. A recent copy of an energy bill or the property tax receipt or water bill must be sent to confirm admission to the registered office. In addition to the tenancy agreement, the maintenance bill or the sale deed, or a letter from the landlord with his/her permission to use the office as the company’s registered office is accepted.
An identity and address proof of all the directors and the subscribers to the share capital must be submitted.
What are the rules to select the name of the company?
It unmistakably should be a very Unique Name and cannot be a duplication of any trademark which is already registered. The second thing to keep in mind is keeping the name a bit creative and not too general, and the name should not contain any kind of abbreviation, adjectives, and generic words. The resemblance to any government-administered company is prohibited and can be penalized.
Settle My Tax will help you with starting your Company
- We will do the needful:
- Open bank account within 30 days
- Deposit Share Capital money within
- 30 days
- Appoint Auditor within 30 days
- Issue Share certificates – within 60 days
- File commencement certificate within
- 180 days
Acquiescence after the establishments of a Private Limited Company is:
- Deposit Share capital amount in the bank account of the company within 30 days:The share capital amount must be deposited by all the shareholders in the company bank account within 1 month from the date of establishment. This money can be utilized for all the business expenses and to reimburse directors.
- Mandatory Registrations – PAN, TAN, Professional Tax and Shop act registration
- PAN – Pan is one of the most significant certificates of the company. It is an Identity proof of the company and is mandatory for each kind of registration.
- Professional Tax –This is an obligatory registration for all companies and commercial establishments and is required for all the owners to take it.
- TAN – This also one of the necessary certifications. The full form id Tax Account Number. It is used required to deduct TDS and claim the credit of TDS deducted by your payers.
Goods and Services Tax (GST) Registration
Every business with annual turnover exceeds Rs. 40 lakh (for Service providers Rs. 20 lakh) is required to GST Registration under Goods and Services Tax (GST) Act and Rules.
It is not mandatory to obtain GST immediately after incorporation of the Company. The Company can obtain this registration as and when required.
In case the company has to produce its GSTIN to any third parties or authorities for its business, the company has to obtain the GST Registration immediately after registration of Company.
IEC – Import export code is appropriate for businesses that are retained in the import and export of goods for trading purposes.
Mandatory Tax Compliances:
- Tax Deducted at Source (TDS) – TDS is Tax Deducted at Source. Whenever the company makes payments to anyone for assistance, then the company has to deduct TDS on the same and deposit it to the government. So for payments for rent, services, credit, commissions, etc. you have to deduct TDS.
- Professional Tax Return – Professional tax return has to be filed every month or year depending on the recurrence as per the state laws.
- Income Tax return– The income tax return has to be filed by every entity even if it is not receiving profits. The due date for Private Limited Company.
Registration of Company (ROC) Compliances
- The First meeting of the Board of Directors of a Private Limited Company shall be conducted within 30 days from the date of the Establishment of the company.
- Moreover, four Board Meetings shall be held in a calendar year (one meeting every 3 months).
- In case of a Private Limited Company which is classified as a “Small Company”, at least two Board Meetings shall be held in a calendar year (one meeting in every half year)
- Minimum 2 administrators or 1/3rd of the cumulative number of directors, whichever is greater, are required to be present in the meeting of the Board of Directors. The deliberations of the conference need to be drafted and recorded in the form of “Minutes of the Meeting” and maintained at the Registered Office of the Company.
- Private Limited Companies are required to file their Annual Accounts and Returns disclosing details of its shareholders, directors, etc. to the Registrar of Companies. Such compliances are required to be made once a year.
Annual General Meeting
- Every Private Limited Company is expected to hold a meeting of its shareholders once every year within six months from the date of closing of the fiscal year.
- The prime agenda of an AGM includes the consent of financial statements, the publication of dividends, appointment or re-appointment of auditors, appointment, and remuneration of directors, etc.
- The Annual General Meeting shall be accommodated during business hours on a day which is not a public holiday and shall secure a place at the certified office of the company or at some other place within the city, town, or village in which the registered office of the company is situated.
- The purpose of a statutory audit is same as the purpose of any other audit – to conclude whether an organization is providing a fair and accurate representation of its financial position by analyzing information such as bank balances, bookkeeping records, and financial transactions.