How To Register Private Limited Company? A Complete Guide

After having a concrete idea about starting a business, the first question comes in mind that "How To Register Private Limited Company In India." Don't worry; here we are going to discuss business registration in India. These days company registration in India is very transparent and accessible as it is entirely online.

But while registration, it is crucial to choose the business structure because each business have different level of compliance to be met with. For example, Private Limited Company, One Person Company, Limited Liability Partnership. The most preferred structure of business registration is a Private Limited Company.

A small group of people holds a Private Limited Company. It is registered for pre-defined objects and owned by a group of members called shareholders. Startup and business with high growth aspiration popularly choose Private Limited Company as a suitable business structure.

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Also Read- A Complete Guide For Cancellation Of A Registered Trademark In India

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Some Benefits Of Private Limited Company

• Limited Risk To Personal Assets

The shareholder of a Private Limited Company has limited liabilities, which means that as a shareholder, you will be liable to pay for the Company's liability only to the extent of the contribution made by you.

• Legal Entity

The Private Limited Company has a separate legal entity different from you. It means that the Company is responsible for managing its assets and liabilities, debtors, and creditors. And you are not accountable to it. This means creditors cannot proceed against you to recover their money.

• Raising Capital

Even though registering a Private Limited Company comes up with compliance requirements, it is preferred by entrepreneurs. It helps them raise funds through equity and expand at the same time, limits the liability.

• Trustworthiness

Companies in India are registered with the registrar of Companies under the Company Act 2013. Anyone can check the detail of the Company through the Ministry of Corporate Affairs. Also, the details of all the directors are provided during the formation of the Company. Thus the Private Limited Company form of business structure is trusted more.

Steps To Register Private Limited Company In India

If you are looking to register Private Limited Company In India, these below-listed processes will help you with this. These steps are 

1. Obtain Digital Signature

The first step is to procure the digital signature of the person involved in a Private Limited Company In India. The basic need for digital signature arises for filling of e-forms on the online portal of MCA. 

The person involved in company formation in India is subscribers and directors for the proposed Company. The subscriber is the promoter of the Company and proposed shareholder. The shareholder is required to file e-MOA & e-AOA by affixing DSCs, whereas the proposed director should obtain for DIN by making an online application.

Document Requires For Digital Signature

• Passport size photo of the applicant
• Self-attested address proof Of the Applicant
• Self-attested PAN Card Of Applicant

2. Obtain Director Identification Number

Director Identification Number is a unique number that is assigned by the Minister of Corporate Affairs to the individual making an application for allotment of DIN. The Director Identification Number is allotted for a lifetime by the Ministry unless it is surrender or withdrawn. Obtaining Director Identification Number is mandatory to be appointed as a director in any company.

The document requires For Director Identification Number

• Passport Size Photograph Of Applicant
• Self-attested Address Proof Of Applicant
• Self-attested PAN Card Of Applicant

3. Reservation Of Name

In an attempt to ease procedures for new as well as existing companies, the Ministry Of Corporate Affairs has introduced RUN (Reserve Unique Name) form for reservation of name of the organization. To fill the RUN form, you need not submit DSCs and DIN.

With effect from March 23rd, 2018 Ministry of Corporate Affairs has decided to permit two proposed names and one re-submission while reserving Unique Name for the companies. to choose the general name practice should be followed these are

• The name should be easy to spell
• The name should give a distinct identity of the Company
• It should be short and simple
• The name should not contain a word which opposes to the public policy or prohibited
• The proposed name neither infringe any Trademark registered nor shall be similar to any company

The application for the name's reservation should be submitted with a maximum of 6 names, out of which the registrar will approve any name, or they may ask to provide an additional name. Once the name application's reservation is recommended, the registrar shall reserve the same name for 60 days. The application of the incorporation should be made within 60 days. After a day, you need to fill the fresh application for reservation of the name. 

4. Certificate Of Incorporation

After reservation of the name for the proposed Company by submitting form INC-1, the application for assurance of the certificate of Incorporation should be made. The application of the online registration for the Company is needed to be made by online submission of SPICe form, i.e., Simplified Proforma For Incorporating Company Electronically.

Document Required For The Application

• Utility Bill or NOC form the owner of the Registered Office Address of the Company
• Rental agreement with the owner of the registered office & Rent receipt, if premises is rented
• Consent to act as a Director of the Company in Form DIR-2
• Affidavit and declaration by the 1st subscriber and director in INC-9
• An exact certified copy of the self-attested identity proof of the first subscriber and director

The application for the certification of the Incorporation should be submitted by paying the requisite Government Fees and Stamp Duty as an application in case of a Concerned sate on the portal. On review and verification of the application, the registrar on his satisfaction may issue the certificate of Incorporation. The issued Certificate Of Incorporation includes the date of the incorporation as well as the PAN (Personal Account Number) of the Company.

About The Author 

Abhishek Kumar

M.Tech (Biotechnology)