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

A Private Limited Company (PLC) 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.

Advantages of Private Limited Company in India

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.

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.

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.

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.

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 Registering a Private Limited Company

Step 1: Obtain DSC (Digital Signature) 

Digital signatures are required to file the forms for company formation. The registration process is completely online and thus, DSC is mandatory for all subscribers and witnesses in the memorandum and articles of association. You can obtain the digital signature certificates from government recognised certifying agencies. You must obtain either class 2 or class 3 category of 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. You can obtain a DIN by filing Form DIR 3 or through the SPICe+ Form. A maximum of three directors can apply for DIN through the SPICe+ Form. 

Step 3: Name Approval

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. 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. 1,000 both the times. 

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. 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 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). 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.

Step 5: e-MoA(INC-33) and e-AoA (INC-34) 

e-MoA refers to an electronic Memorandum of Association and e-AoA is electronic Articles of Association. Memorandum represents the charter of the company while articles of association contain the internal rules and regulations of the company.

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) 

Form AGILE PRO 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 Time required to register a company?

The whole process including approval of DIN, Name, and Incorporation takes around 10-15 working days.

Private limited company registration has become a fast process as all documents are dragged in a single application form with MCA. It is a big step towards e- governance and for businesses who are looking for expansion of operations.