Liquetax: Your Trusted Partner for Expert Tax Guidance and Personalized Service
Liquetax: Your Trusted Partner for Expert Tax Guidance and Personalized Service
Blog Article
Starting a business is an exciting endeavor, but choosing the right structure is crucial for long-term success. In India, the Private Limited Company (PLC) is the most popular form of business registration due to its numerous benefits such as limited liability and a separate legal entity for shareholders and directors. More than 90% of registered companies in India fall under this category. Here, we will walk you through the essential aspects of Private Limited Company registration, including the process, fees, and requirements.
Why Choose a Private Limited Company?
A Private Limited Company offers several advantages, making it a preferred choice for entrepreneurs:
Limited Liability: Shareholders’ liability is limited to the amount of their share capital, protecting their personal assets from business debts and risks.
Separate Legal Entity: A Private Limited Company has a distinct legal identity from its owners, meaning it can own assets, incur liabilities, and enter into contracts.
Reputation and Credibility: PLC registration enhances the credibility and reputation of your business in the market, making it easier to attract investors, secure loans, and build trust with clients and suppliers.
Ease of Ownership Transfer: The shares of a Private Limited Company are transferable, making it easier to manage changes in ownership.
Tax Benefits: A Private Limited Company is taxed separately, and business owners can avail various deductions and exemptions, leading to significant tax savings.
Key Requirements for Private Limited Company Registration
Before you start the registration process, you need to meet the following key requirements:
Minimum Directors: A Private Limited Company must have at least two directors. One of them must be an Indian resident.
Minimum Shareholders: A minimum of two shareholders is required. The same individuals can act as both shareholders and directors.
Unique Name: The company name must be unique and should not resemble any existing registered companies or trademarks in India.
Registered Office Address: You need a valid office address within India, which will serve as the company’s official correspondence location.
Documents Required for Registration
To register a Private Limited Company, you will need the following documents:
PAN card of all directors and shareholders.
Address proof (Aadhaar Card, Voter ID, copyright, etc.) of all directors.
Proof of registered office address (rental agreement or ownership document and utility bills not older than two months).
copyright-size photographs of directors.
Director Identification Number (DIN) and Digital Signature Certificate (DSC) for all directors.
Step-by-Step Registration Process
Obtain DSC and DIN: The first step in the registration process is to obtain a Digital Signature Certificate (DSC) and a Director Identification Number (DIN) for all directors.
Apply for Name Approval: File an application with the Ministry of Corporate Affairs (MCA) to reserve a unique company name. This name should reflect the nature of your business and comply with the Companies Act, 2013 guidelines.
Submit Incorporation Documents: Once the name is approved, you need to submit the required documents, including the Memorandum of Association (MoA) and Articles of Association (AoA), to the MCA.
File for Incorporation: Complete the company registration process by submitting all required forms and documents online via the MCA portal. Once approved, you will receive a Certificate of Incorporation from the Registrar click here of Companies (RoC).
PAN and TAN Application: After incorporation, apply for a Permanent Account Number (PAN) and Tax Account Number (TAN) for your company, which are necessary for tax purposes.
Open a Bank Account: After receiving the Certificate of Incorporation, you can open a bank account in the name of the Private Limited Company.
Costs and Fees
The cost of registering a Private Limited Company in India can vary based on several factors, such as professional fees, government fees, and additional services required. On average, the registration process can cost between INR 7,000 to INR 20,000, depending on the number of directors and the capital of the company.
Government fees depend on the authorized capital of the company. Additionally, charges may apply for obtaining DSCs and DINs for directors.
Post-Registration Compliance
Once your Private Limited Company is registered, there are ongoing compliance requirements to ensure the company remains active and compliant with regulatory authorities:
Annual General Meetings: Hold AGMs within six months from the end of the financial year.
Financial Statements: Prepare and file annual financial statements and returns with the MCA.
Income Tax Filings: File corporate tax returns annually, along with other relevant tax documentation.
Conclusion
Registering a Private Limited Company is a straightforward process when done correctly. By ensuring compliance with regulatory requirements and leveraging the benefits offered by a Private Limited Company, you can create a strong foundation for your business. With expert guidance and personalized service, Liquetax can help you navigate the complexities of company registration Private limited company registration and ensure that your business is set up for long-term success.