Private Limited (Pvt Ltd) Company Registration Online in India - Step by Step Process PPC

What is a Private Limited Company?

A private limited company is a company privately held for small businesses. This type of business entity limits owner liability to their shareholdings, the number of shareholders to 200, and restricts shareholders from publicly trading shares.

What are the advantages for incorporation of Private Limited Company in India?

1. Limited risk to personal assets The shareholders of a private limited company have limited liability. This 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.

2. Legal Entity A PLC has a separate legal entity different from you. This means that the Company is responsible for the management of its assets and liabilities, debtors and creditors. The company can sue for recovery of debts in its own name and can be sued by creditors and lenders.

3. Raising Capital Even though registering a PLC comes with compliance requirements, it is preferred by entrepreneurs as it helps them raise funds through equity, expand and at the same time limits the liability.

4. Trustworthiness Companies in India are registered with the Registrar of companies(ROC) under Companies Act 2013. Anyone can check the details of the company through the Ministry of Corporate Affairs (MCA). Also, details of all the directors are provided at the time of formation of the company. Hence a PLC form of business structure is trusted more.

5. Continue Existence A company has ‘perpetual succession’, that is continue or uninterrupted existence until it is legally dissolved. A company, being a separate legal person, is unaffected by the death or cessation of any member but continues to be in existence irrespective of the changes in membership.

Steps for forming a Private Limited Company:

Looking to register your company as a private limited company? Registering your company as a private limited company is difficult as the procedure is complicated and involves many compliances. Do not fear as our experts can help you in every step of the private limited company registration. Instead of reading through the entire registration process, you can avail our expert service.

Step 1: Obtain Digital Signature Certificate (DSC)*

Step 2: Obtain DIN*

Step 3: Name Availability

Step 4: Form SPICe+ INC-32

Step 5: MOA and AOA

Step 6: PAN and TAN Application

* The RUN Web service earlier available for name availability will be available only for change in name of an existing company. The change is effective from 23 February 2020.

Step 1: Obtain DSC (Digital Signature) Digital signatures are required to file the forms for company formation. The registration process is online and the forms require a digital signature. DSC is mandatory for all subscribers and witnesses in the memorandum and articles of association. You must obtain the digital signature certificates from government recognized certifying agencies. The list of such certified agencies can be accessed here. Or you can get your DSC online in just two days from here. The cost of obtaining DSC varies depending upon the certifying agency. You must obtain either class 2 or class 3 category of DSC. Under Class 2 category, the identity of a person is verified against a pre-verified database whereas, under class 3 category, the person needs to present himself before registering authority to prove their identity. To acquire DSC

Step 2: Apply for DIN (Director Identification Number) DIN is an identification number for a director. It has to be obtained by anyone who wants to be a director in a company. One DIN is enough to be a director in any number of companies.

There are 3 ways of obtaining DIN:

Option 1:File form DIR 3. The Form DIR-3 is applicable to a person who wants to become a director in an existing company. This form required basic details of the proposed director along with identity proof like PAN, Aadhaar Card, etc and address proof. With effect from 23 February 2020, in case of new companies, DIR-3 need not be filed separately. Now DIN can be applied within SPICe+ form for up to three directors.

Option 2: With filing SPICe+, DINs gets issued to the proposed directors who do not have a DIN. Under this process of filing through SPICe+ web based form, maximum of three directors can apply for DIN. If applicant want to incorporate Company with more than 3 Directors and more than 3 persons doesn’t have DIN. In such situation applicant have to incorporate Company with 3 Directors and have to appoint new directors later on after incorporation.

Option 3:Click on the link & let a ClearTax expert procure DIN for you. If you go for Private Limited Company – Registration with ClearTax, up to 2 DINs are covered in the plan & there is no need to apply for DIN separately.

Step 3: Name Approval

To get the name approval, there are following options:

Option 1:Incorporating a Company via SPICe+ web based form: In an attempt to ease procedures for new as well as existing companies,w.e.f 23 February 2020, the Ministry of Corporate Affairs (MCA) has introduced SPICe+ web service for the incorporation of a company. Part A of the SPICe+ form allows for ‘name reservation’ with two proposed names and one re-submission (RSUB) while reserving Unique Names for the Companies. In case of rejection of the name due to any similarity of name with a registered company, an LLP or trademark or due to non-adherence of the Companies (Incorporation Rules) 2014, the applicant has to re-file another SPICe+ form with prescribed fee.

Please note that DSC and DIN shall not required for filling of SPICe+ form for reservation of name. Only MCA Account is mandatory.

After filling Part A, an applicant can submit the application (Part A) for name reservation after payment of the fee. Alternatively, the applicant can also proceed for incorporation. In a case the applicant wished to proceed for incorporation, only one name can be proposed (instead of two names).

Option 2:You can apply for the proposed name along with the application for incorporation. Part-B of the SPICe+ enables applying for incorporation. Similar to the earlier SPICe form, SPICe+ also enables combined application for incorporation and name approval. That means the Part-A and Part-B of SPICe+ form can be submitted together. However, only one name can be applied to this form.

In case of a combined application, in case of rejection due to non-approval of the name, the applicant will get a second chance of refilling the same SPICe+ form without any further charges. It means you get two chances of filing the same form without any extra charge of paying Rs. 1000/- both the times. The resubmission of the SPICe+ form (both for standalone name approval and incorporation) can be made using the ‘name applied for’ or ‘application number’ link available on the user’s dashboard.

In case of failure to get the name approved in the second go, you can file the SPICe form again from scratch. This will any day prove to be cheaper than opting for the first option. The whole process including name approval and incorporation takes around 2-3 days

Step 4: Form SPICe+ (INC-32) After obtaining the name approval under Step 3 above, the applicant can apply for incorporation. The incorporation under Part-B is also web based and streamlines the incorporation of companies. Upon the name approval, the applicant can click on the link of the approved name (available on the user’s dashboard) and continue to complete the incorporation. The Part-B of the new SPICe+ form enables the web based incorporation and serves the following purposes with the benefit of a single application:

• Application for allotment of DIN (Director Identification Number)
• Reservation of company name
• Incorporation of a new company
• Application for PAN and TAN (mandatory)
• Application for EPFO registration (mandatory)
• Application for ESIC registration (mandatory)
• Application for Professional tax registration (only for Maharashtra)
• Application for opening a bank account for the company (mandatory)
• Allotment of GSTN (Goods and Service Tax registration number) if applied for (optional)

The new SPICe+ form facilitates web based entries and real time validation of data making incorporation a seamless and quick process. The details filled in Part-A and Part-B of SPICe+ will be automatically filled in the linked forms AGILE-PRO, eAoA, eMoA, URC1, INC-9 (as applicable). All these forms have to be downloaded in PDF and digitally signed, and later submitted for incorporation purposes. The details for applying for PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) have to be provided in the SPICe+ form (INC-32). Upon the filling of the SPICe+ form, the user has to also download the form SPICe+ in a PDF format and affix the DSC to digitally sign the form.

The digital signature of a professional is required to file Form INC-32. The professional must certify that all the information given in the form is correct. The professional can be Chartered Accountant, Company Secretary, Cost Accountant or advocate.

Prior to May 2015, the registration of companies required the filling up of several documents, such as the DIR–3 for acquiring the DIN (Director Identification Number), INC-1 for obtaining a name, INC–7 for registering the company with the Memorandum and Articles of Association, INC–22 for the registered office and finally, Form DIR-12 for the directors. Now, all of these forms have been merged together.

With effect from 23 February 2020, the application for incorporation of a Company should be made in the SPICe+ form only. No ROC fees for Incorporation of Company up to 15 lakh of authorized capital.

Step 5: e-MoA(INC-33) and e-AoA (INC-34) e-MoA refers to an electronic Memorandum of Association and eAoA is electronic Articles of Association. These forms have been introduced to simplify the process of company registration in India.

Memorandum represents the charter of the company while articles of association contain the internal rules and regulations of the company.

Earlier memorandum of association and articles of association were required to be filed physically. But now these forms are filed online on MCA portal as a linked form with SPICe+ (INC-32). The PDF of these filled forms must be digitally signed by subscribers to the Memorandum and Articles of Association. While filing the SPICe+ e-MoA and e-AoA, a declaration must be submitted by the first subscribers and directors in Form INC-9. The subscribers need not submit any affidavits, only simple declaration is enough. All the linked forms must be submitted along with the SPICe+ form for incorporation.

Step 6: Form AGILE PRO (Form-35) is a collective application for registration with EPFO, ESIC, GST, Professional Tax and opening a bank account. The form AGILE PRO should be submitted along with the application for incorporation of a company.

If all the details in the form are duly filled in along with the required documents, MCA will approve the registration and a CIN (Corporate Identity Number) will be allocated. You can also track this CIN online on MCA portal.

Documents required for filing SPICe+ (INC-32)

The following documents must be filed with SPICe+ (INC-32) for the incorporation of a company:

A. Where director and subscriber are Indian Nationals

• Declaration in Form INC-9 by the first subscribers and directors
• Proof of office address – Rental Agreement
• Copies of utility bills that are not older than two months
• Copy of approval in case the proposed name of the company contains any word(s) or expression(s) that require approval from central government
• If the proposed name is based on a registered trademark or is subject matter of an application pending for registration under the Trade Marks Act, then it is mandatory to attach the trademark registration certificate or trademark application copy
• NOC from the owner of the property
• In case of subscribers/ Director does not have a DIN, it is mandatory to attach, proof of identity and address proof of the subscribers

B.Where director/subscriber is a foreign National

• Passport
• Address proof: It can be driving license, residence card, bank statement, Government issued form of identification containing an address

Registered office proof: It can be registered document which shows the title of the premises in the name of the company or notarized copy of lease deed or rental agreement

What is the Cost involved in Private Limited Company Registration?