Registering a private limited company in India is not as difficult as it used to be. With the help of the internet, you can now do it yourself without having to go through a middleman. This guide will show you how to register a private limited company in India, so that you can start your new venture with ease. We will cover everything from choosing a name for your company to getting the required approvals and licenses. By the end of this guide, you will have all the information you need to get started on setting up your own private limited company registration in India.
What is Private Limited Company
A Private Limited Company is a type of business entity in India that is privately held and offers limited liability to its shareholders. It is the most popular form of business entity for small and medium enterprises in India. A private company must have a minimum of 2 shareholders and a maximum of 200 shareholders. A private company can be incorporated with just 1 director, but must have a minimum paid-up capital of INR 100,000.
The main advantages of a Private Limited Company are:
1. Limited Liability: The liability of shareholders is limited to their shares in the company. If the company is unable to pay its debts, creditors cannot go after the personal assets of shareholders.
2. Raising Capital: A Private Limited Company can raise capital by issuing shares to investors. This is a cheaper and easier way to raise money than taking out loans from banks.
3. Professional Management: A Private Limited Company must have at least 2 directors, which gives the company a professional management structure. This makes it easier to run the company and make decisions.
4. Transferring Ownership: Shares in a Private Limited Company can be easily transferred between shareholders without affecting the control or operation of the company.
How To Register Private Limited Company
A private ltd company is a legal entity that is separate from its shareholders in financial business market. The shareholders own the company, but the company has its own identity and legal rights. A private limited company can enter into contracts, sue and be sued, and own property.
To register a private limited company in India, you will need to file an application with the Registrar of Companies (ROC). The ROC will then issue a certificate of incorporation for your Pvt ltd company. The minimum number of shareholders for a private limited company is two, and the maximum is fifty.
The articles of association (AOA) are the rules that govern how a private limited company will be run. The AOA must be filed with the ROC when the company is registered.
Shareholders of a private limited company must agree to take on liability for the debts of the company up to the amount they have invested. This is called “limited liability.” Limited liability protects shareholders from being held personally liable for the debts of the company beyond their investment.
A private limited company must have at least one director for the time of company formation. Directors are responsible for managing the affairs of the company and ensuring that it complies with laws and regulations.
In order to register a Private Limited Company in India, applicants must follow these steps:
1) File an application with Registrar of Companies
2) Obtain a Certificate of Incorporation
3) Draft Articles of Association
4) Register for taxes
Why Private Ltd Company Important for Startup Business
There are a number of reasons why a Private Limited Company (PLC) is an important structure for a startup business in India. Firstly, a PLC offers limited liability protection to its shareholders. That means the shareholders are not personally liable for the debts and liabilities of the newly incorporated company. Secondly, a PLC is a separate legal entity from its shareholders. This means that the company can enter into contracts and own property in its own name for startup company. Thirdly, a PLC must have at least two shareholders and a maximum of fifty. This makes it easier to raise capital from investors as there are more potential investors available. Fourthly, a PLC can be listed on stock exchanges, which provides another avenue for raising capital and also enhances the company’s visibility.