Private Limited (Pvt Ltd) Company Registration Simplified

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 of Private Limited  Company Registration 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 company’s liability only to the extent of the contribution made by you. The shareholders do not have any personal liability and hence need not pay for the company’s liability out of their own assets. 

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. You will not be held responsible for the losses of the company. So, the creditors cannot proceed against you to recover the money.

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 the Companies Act 2013. Anyone can check the details of the company through the Ministry of Corporate Affairs (MCA) portal. Also, details of all the directors are provided while the formation of the company. Hence a PLC form of business structure is trusted more.

5. Continue Existence – A company has ‘perpetual succession’, i.e. 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.

Different forms of company registration

There are other forms of company registration such as

• Partnership Firm Registration
• Proprietorship Firm Registration
• Limited Liability Partnership (LLP) Registration
• One Person Company (OPC) Registration
• NGO Registration ( Section 8 Company Registration )

How to Register 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: e-MOA and e-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 completely online and the forms require a digital signature. DSC is mandatory for all subscribers and witnesses in the Memorandum of Association (MOA) and Articles of Association (AOA).

You must obtain the digital signature certificates from government recognized certifying authorities. The list of such certified authorities 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 authority. You must obtain 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.

Step 4: Form SPICe+ (INC-32) The MCA has introduced Form SPICe+ for the registration of new companies from 23 February 2020. The incorporation under Part-B of the SPICe+ form 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. 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. With effect from January 2018, New Process of Name Approval “RUN” notified and e-form INC-1 omitted. INC-7 form omitted.

Now, all of these forms have been merged together in the SPICe+ form and RUN service is available only to change existing name. Only way out for incorporation of Company is SPICe+ form. No ROC fees for Incorporation of Company up to 10 lack 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). Both these forms must be digitally signed by subscribers to the Memorandum and Articles of Association.

Step 6: PAN and TAN Application Through this single form SPICe+, you can also apply for company’s PAN and TAN. The system will auto-generate these forms after the submission of SPICe+ form. The Certificate of Incorporation of PLC is issued with the PAN as allotted by the Income Tax Department after approval of the SPICe+ Form. An email containing the Certificate of Incorporation, PAN and TAN will be sent by the MCA. The Income Tax Department will issue the PAN card.

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 a private limited company registration:

A. Where director and subscriber are Indian Nationals

• An Affidavit on a Stamp Paper is to be given by all the subscribers of the Company to state their willingness to become the shareholders of the Company
• Proof of office address – Rental Agreement or Ownership Deed such as Sale Deed
• Copies of utility bills such as electricity bill, water bill or gas bill not older than two months
• 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, if the registered office is on a rented/leased 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

How ClearTax Helps in Private Limited Company Registration?

With ClearTax, you can establish your private limited company seamlessly. You can register your Private Limited Company in just 4 simple steps:

Step 1: Purchase the Plan

Purchase our Private Limited Company (PLC) Registration plan. You can even chat with our experts by entering your email, phone number and request a callback. Our experts will contact you and clear all your queries. 

Step 2: Upload the Documents on our Website

Upload the below-mentioned documents on our website to incorporate your company:

• Passport size photos of directors
• Address proof of directors
• Photo ID proof of directors
• Specimen signature
• Self-declaration about your directorship in other companies
• Rent agreement of your registered office
• No objection certificate from the owner of the property of the property
• Aadhaar card
• PAN card

The company registration from ClearTax is completely online and thus, you can save time and money as you need not have to visit our office.

Step 3: Document Verification by our Experts and Signature of Documents

Our experts will verify the documents uploaded by you. You will need to attest your signature on the documents. 

Step 4: Our Experts will File Forms on the MCA portal to Incorporation your Company

Our experts will file the below forms on behalf of you on the MCA portal –

• Digital Signature Certificate (For 2 proposed directors) Application
• Company Name Reservation 
• Filing of e-forms with ROC 

After the company forms are filed on the MCA portal, the Registrar of Companies (ROC) and the respective departments will verify the forms submitted by our expert. The verification process takes around 10 days (subject to departmental approval and reverts from the respective departments). 

Our experts will follow up with the respective authorities till you receive the Incorporation Certificate. After the verification process is complete, you will receive the Incorporation Certificate along with PAN and TAN in about 10 days.

• What are the prerequisites to incorporate a Private Limited Company?

  The prerequisites for the incorporation of a private limited company are that:

  1. The number of members must be between 2-200.
  2. There must be at least two directors and two shareholders
  3. Each director must have a Directors Identification Number (DIN)
  4. PAN card copy of directors/shareholders and Passport copy for NRI subscribers.
• Can the private company be incorporated with a residential address?

  Yes. The company needs to provide address proof for incorporation. But the Ministry of Corporate Affairs (MCA) allows a residential address to be used as the company’s registered address. Thus any address can be provided as the registered address.
• What are MOA and AOA?

  Memorandum of Association (MOA) is defined under section 2(56) of the Companies Act 2013. It is the foundation on which the company is built. It defines the constitution, powers and objects of the company.
  The Articles of Association (AOA) is defined under section 2(5) of the Companies Act. It details all the rules and regulations relating to the management of the company.
• How is SPICe INC 32 different from SPICe+ INC 32?

  While SPICe is an eform, SPICe+ is an integrated Web form offering 10 services by 3 Central Govt Ministries & Departments. (Ministry of Corporate Affairs, Ministry of Labour & Department of Revenue in the Ministry of Finance) and One State Government (Maharashtra), thereby saving as many procedures, time and cost for Starting a Business in India. SPICe+ is part of various initiatives and commitment of the Government of India towards Ease of Doing Business (EODB). SPICe INC 32 was being filed for company incorporation prior to 15th February, 2020. Currently for incorporating all new companies, SPICe+ form is required to be filed on the MCA portal.
• Is there a limit on the number of directors that can use the SPICe+ INC 32 for obtaining DIN?

  For the incorporation of the company, a maximum of three directors can use the integrated form for filing application for allotment of DIN.
• Are PAN and AADHAR mandatory for the subscribers to MOA and AOA?

  No. The Companies (Incorporation) Third Amendment Rules dated 27th July 2016 has relaxed the mandatory attachment of proof of identity and residence in respect of a subscriber having a valid DIN.
• Is it mandatory to file eMOA and eAOA along with SPICe+ INC 32?

  Yes, it is mandatory to file eMOA and eAOA in the following circumstances:

  1. individual subscribers are Indian nationals
  2. If individuals subscribers are foreign nationals, then they have a valid DIN and DSC and also submit proof of a valid business visa
  3. non-individual subscribers based in India
• How are PAN and TAN communicated to the user once SPICe INC 32 is accepted?

  On acceptance of SPICe forms, the Certificate of Incorporation (COI) will be issued with valid PAN and TAN as allotted by the Income Tax department. An email with the COI as an attachment along with PAN and TAN will be sent to the applicant. PAN and TAN in the email will be held valid as the requirement for a laminated card for PAN has been done away with.