Private Limited

An Overview of Private Limited Company Registration

In India, establishing a Private Limited Company is one of the most popular ways to commence a business. Private Limited Company Registration is done under the Companies Act, 2013 and governed by the Ministry of Corporate Affairs (MCA). A Private Limited Company provides limited liability and legal protection to its shareholders. It’s a corporate structure that provides a business with a separate legal identity from its owners. The Private Limited Company doesn’t have any relationship with the public; they are not allowed to ask for any collateral from any public or public sectors. In this type of Company, individuals are not liable to transfer shares, which protects takeovers of Private Limited Companies from big enterprises.

The Private Limited Company Registration procedure is essential as it provides legitimacy to your business structure. If you want to go for Private Limited Company Registration in India, you can entirely rely on MSA Professional.  MSA Professional  will help you provide all the relevant information regarding Private Limited Company Registration.

Benefits of Private Limited Company Registration in India

A Private Limited Company is one of the most common forms of legal entity to carry on business intending to make a profit and enjoy the benefits of an incorporated entity. Following are some benefits of getting Private Limited Company Registration in India:

1. Better Credibility: Due to their accountability towards the authorities, a Private Limited is more credible among its customers and contributes to creating a more extensive customer base.
2. Separate Legal Entity: A Private Limited Company (Pvt. Ltd.) is a separate legal entity that possesses all the rights to sue or be sued. A company is a legal entity and a juristic person established under the Act. A juristic individual is an individual who is not a natural person. Therefore a company has vast legal capacity and can own property & also incur debts. The Directors or Shareholders of a company have zero liability to the creditors of a company for such debts. Therefore, a Private Limited Company is a legal entity separate from its members (Shareholders or Directors).
3. Raising Capital: Even though Private Limited Company Registration comes with compliance requirements, it is desired by entrepreneurs as it helps them raise funds via equity, expand and at the same time limits their liability.
4. Perpetual Existence: A Private Limited Company in India has a lifelong existence. Being a separate legal entity, the Company is unaffected by the death or other departure of any member but continues to exist regardless of the changes in membership. This benefit is one of the most vital characteristics of a company.
5. Borrowing Capacity: A company enjoys better opportunities for borrowing funds. It can issue debentures, secured & unsecured deposits, and accept deposits from the public. Even banking & financial institutions prefer to provide substantial financial help to a company rather than Partnership Firms or Proprietary.
6. Easy Transferability of Shares: Shares of a Private Limited Company are transferable by a shareholder to any other person. The transfer of shares is easy compared to the transfer of an interest in a business run as a Proprietary concern or a Partnership. Filing & signing a share transfer form and handing over the buyer of the shares along with a share certificate can easily transfer shares.

Procedure for Private Limited Company Registration in India

Following is the step by step procedure for Private Limited Company Registration in India: Step 1: Obtain DSC: Before setting up a Private Limited Company in India, Digital Signatures are required to obtain first. As you already know, the registration process is entirely online and online forms require a Digital Signature. That’s why Digital Signature Certificate (DSC) is required. You can get your DSC online in just a few days from Swarit Advisors. Step 2: Filing SPICe+ Form: With this form, the company’s directors get DINs (Direction Identification Number) who don’t have a DIN. Under this filing process through SPICe+, a minimum of 3 directors can apply for DIN. In case the applicant wants to register Company with more than 3 directors and more than 3 person does not have DIN, then the applicant has to register a Company with 3 Directors and must appoint new directors later on after incorporation. The applicant can also use this form for Name approval by filing Part A and B of the SPICe+ Form together. Part-A of the SPICe+ Form allows for name reservation with 2 proposed names and one re-submission while reserving Unique Names for the Companies. The applicant can apply for the proposed name along with the application for Private Limited Company Registration. Part-B of the SPICe+ Form enables applying for Private Limited Company Registration. Similar to the earlier SPICe Form, SPICe+ Form also enables combined application for Registration and Name Approval of the Company. That means Part-A and Part B of this form can be submitted together. Part – B of the new SPICe+ Form serves the following purposes:

1. Incorporation of a new company;
2. Application for EPFO and ESIC Registration;
3. Reservation of a new company name;
4. Application for DIN;
5. Application for PAN & TAN;
6. Opening of a Bank Account for the Company and so on;

Step 3: e-MoA and e-AoA: e-MoA stands for Electronic Memorandum of Association and e-AOA stands for Electronic Articles of Association. These two e-forms have been introduced to simplify the process of Private Limited Company Registration in India. These two forms can be filed online at the official website of MCA as a linked form with SPICe+ and these forms must be digitally signed by subscribers to the AoA and MoA. Step 4: Apply for PAN & TAN of the Company: Through SPICe+, the applicant can apply for the PAN and TAN of the Company. The Certificate of Incorporation of the Private Limited Company is issued along with the PAN as allotted by the ITD (Income Tax Department) after the approval of the SPICe+ Form.