Procedure, Document Checklist And Costs For Incorporation Of A Private Limited Company

Introduction

A Private Limited Company is one that has been established under the Indian Companies Act, 2013 or any prior Companies Act. The prefix "Limited" in the name suggests that the members', or owners', liability is limited to a particular amount. There are however some restrictions in place, in addition to the benefits provided.

In the Indian market, the most common and dominant type is the private limited company. This sort of company is designed specifically for small businesses. The members of a Private Limited Company have a fixed financial commitment, which is entirely dependent on the number of shares they each own.

Also read Partnership firm v. LLP in India. 

The process of SPICe (Simplified Proforma for Incorporating Company Electronically) Private Limited Company Incorporation Filing Process is required to be done. SPICe is a single form that integrates the applications for Reservation of Company Name, Allotment of DIN for Directors and Incorporation of a New Company along with allotment of Permanent Account Number (PAN) and Tax Collection and Deduction Account Number (TAN) to the New Company.

Procedure followed

The essential paperwork needs to be filed on the official MCA website (www.mca.gov.in), which ensures a quick and uncomplicated process. With the "Make in India" initiative, the Indian government currently supports the incorporation of businesses in India. It is only after following the procedures outlined in the Act that the company can be formed and started. The steps that are followed to register a private limited company are as below. It takes around 15 to 18 days to complete the entire procedure.

1. The very first step to register a private limited company is to obtain the DSC (Digital Signature Certificate) of the Directors and Subscribers to Memorandum of Association. An e-form is filed with the Ministry after attaching the DSC of the Authorized Signatory for incorporation of the Company. Also, it is required for the application of DIN of the directors. Further, DSC of the subscriber is needed to file Memorandum of Association and Articles of Association.
2. The next step is to obtain the Director Identification Number (DIN). Under this registration step, the Ministry allots the DIN to the Individual for acting as Director in a company. It is basically a unique number such as PAN Card allotted to any person and which is applied and allotted once in the lifetime.
3. The next stage in the company registration process is to submit an application for the proposed firm's name reservation. The application must be submitted on Form INC-1, which allows for a maximum of six names to be submitted in order of preference. It is important to note that the names chosen are not identical to or substantially equivalent to any existing Company, LLP, or Registered Trademark. Once the name is approved, it is reserved for the applicant for a period of 60 days, during which time the applicant must apply for company incorporation; failure to do so will result in the name being revoked by the Ministry.
4. Once the prospective company's name has been reserved, fill out the Application for Certificate of Incorporation in SPICe form and attach the SPICe MOA and SPICe AOA. The application is submitted by paying the required Stamp Duty on the portal, as applicable in the concerned state. Once the application is filed, an online form for the company's PAN and TAN is generated, which must be completed and sent along with the DSC and MCA. The concerned Registrar of Companies may give the Certificate of Incorporation after thorough examination of the application and supporting papers (COI). It is a conclusive confirmation of the company's existence, containing the date of incorporation, Company Identification Number (CIN), and Permanent Account Number (PAN), as well as the Registrar's signature and seal. As soon as the Certificate of Incorporation is issued, the firm can begin operating as soon as the Incorporation procedure is completed.

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Documents Required

Ensuring proper documentation is an integral aspect of the registration process of the Private Limited Company. The documents thus required for the registration of a private limited company are as follows:

• Directors and Shareholders’ Identity Proofs such as PAN card, Aadhaar Card / Passport / Driving License / Voter Identity Card; Address Proofs such as Telephone Bill / Mobile Bill / Electricity Bill / Water Bill; Bank Statement; Passport size Photographs. All the Copies of documents being self-attested by the applicant.
• Documents are to be signed by the Directors include the Consent to Act as Director: Form DIR-2, Details for DIN, Declaration of DIN.
• Documents to be signed by Shareholders include the Application for Digital Signature Certificate; Declaration by Subscribers & Director: INC-9 4. A no-objection letter from the Owner of Address to use the address of the registered office of the Company.

Costs incurred

India has a diverse range of business types, businesses, and services. Regardless of the sort of business, all of them require some form of government registration. For example, GST registration, VAT registration, IEC registration if you are in the import export business, Professional Tax registration, EPF registration if you are in some type of profession, MSME registration if you are a small and medium firm, and so on. Professional fees, as well as government fees, are associated with several types of registration. Registration fees might range from INR 1500 to INR 15000, depending on the complexity of the activities, state taxes, and other factors. The fees for forming a Private Limited Company vary depending on a variety of parameters such as the amount of capital, the number of shareholders, and the number of directors, among others. The cost of forming a Private Limited Company in India (Pvt Ltd Company Registration) ranges from INR 6,000 to INR 30,000, depending on the number of directors, members, authorised share capital, and professional expenses. The cost of a professional may be determined by the task's complexity. A minimum paid-up capital of Rs. 1 lakh is required for a private limited company. It could go even higher, as MCA may prescribe from time to time.

Also read Which Is Better For A Small Sized Company: LLP Or Partnership?