REGISTRATION OF PRIVATE LIMITED COMPANY
Why Choose Dastawezz ?
A company owned privately for businesses which are small in size is called a Private Limited Company. The maximum number of shareholders in such companies are 200 and they are restricted from publicly trading shares. The shareholders can’t be held liable beyond the value of the shares they hold and such companies are governed by the Ministry of Corporate Affairs. The procedure for registering a Private Limited Company in India is as follows:
1. First obtain a Digital Signature Certificate (“DSC”)
A DSC is required to file various forms for formation of the company and is mandatory for subscribers and witnesses to the Memorandum of Association & the Articles of Association. One can apply online and obtain a DSC from agencies certified by the government. It usually takes a couple of days and cost depends on the agency through which one obtains it. There are two classes – Class 2 DSC where identity of person is cross-checked with an existing database whereas a Class 3 would require the person to be present before the registration authority for verification.
2. Applying for a Director Identification Number (“DIN”)
A DIN is required for a person to be a director in a company and the same DIN can be used to be a director in multiple companies. It can be obtained either by filing a E-form DIR-3 which would require basic details and identity proof of the person proposed to be the director. This is for existing companies. From January 2018, with filing of SPICe form. DINs get issued to the proposed directors who don’t have it already (maximum of 3 and more directors can be added later on).
3. Obtain a Name Approval
The web service Reserve Unique Name (“RUN”) offered by the Ministry of Corporate Affairs (“MCA”), allows for one chance to apply (with 2 proposed names) and in case of rejection there is no second chance that is given. Alternatively, one can apply through the SPICe form but in this case, only one name can be given.
4. Filing of the SPICe form
This is a single form to be filed through MCA portal for DIN allotment, reservation of name of company, incorporation of the company and applying for Permanent Account Number (“PAN”) and Tax Deduction and Collection Account Number (“TAN”).
5. Memorandum and Articles of the Company
There are two linked forms to the SPICe form, namely e-MOA & e-AOA which are electronic forms of memorandum of association i.e. the basic charter document of a company and the articles of association i.e. byelaws of the company respectively.
6. Application for PAN & TAN
Once the SPICe form is submitted, form 49A and form 49B are auto generated by the system. These are required to be duly filled and filed on the MCA portal.
ADVANTAGES / FEATURES
- Personal assets have limited risk in a Private Limited Company.
- The company is a separate legal entity different from its members as a result there is limited liability for them.
- The shares of such a company are transferable easily.
- It can sue and be sued in its own name.
- It has a continuing existence until it is dissolved i.e. perpetual succession.
- There is no minimum requirement of capital.
- When the director / subscriber is an Indian national: an affidavit on stamp paper stating the willingness to become shareholders, proof of the registered office and xerox of utility bills not more than 2 months old.
- In case of a foreign national: passport and address proof both notarized.