Private Limited Company

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Private Limited Company

A Pvt Ltd Company is the most popular legal structure option for businesses in India. A Pvt Ltd Company is a company held for small businesses. Shares of Pvt Ltd Company cannot be publicly traded. The directors of a pvt ltd company have limited liability to creditors.

It is less complicated compared to a Public company. It is comparatively less expensive and less time-consuming. Start-ups and growing companies prefer private limited company as it allows outside funding to be raised easily, limits the liabilities of its shareholders and enables them to offer employee stock options to pull in top talent.

Advantages of Private Limited Company

  • Transparency of Financials
  • Corporate Ownership
  • Preferred by Banks/VC's
  • Separate Legal Entity
  • No such minimum Capital compulsion

Disadvantages of Private Limited Company

  • Public Disclosure
  • Wind Up in case Remaining Director is one
  • No Income Tax Slab available
  • Shares can not be sold on Stock Exchange
  • Compulsory Audit

Documents Required

  • Voter Id / DL / Bank Statement of Director
  • Aadhaar / PAN / Contact/ Photo of Director
  • Address Proof for Company registered office
  • Proposed Name and Objects of Company
  • Capital Structure and Profit Sharing ratio of Directors

What You Will Get

  • Incorporation Certificate
  • MOA & AOA
  • PAN & TAN of Company
  • DSC of Directors
  • DIN of Directors

All about private limited company

There are multiple factors an entrepreneur should consider before choosing the type of business one plans to register. The size and nature of business, fund raising, scale, etc should be considered before choosing the type of business entity. Here are some of the reasons why you should register your business as a private limited company.

  • Limited Liability: One of the most significant advantages of forming a private limited company is that it provides limited liability protection to its shareholders. This means that the personal assets of the shareholders are protected from the company's debts or legal issues.
  • Perpetual Existence: A private limited company has a separate legal entity from its shareholders, which means it can continue to exist even if the shareholders change or if one of them dies. This gives the company longevity and stability.
  • Credibility: A private limited company is seen as a more credible and trustworthy business structure than a sole proprietorship or partnership. This can help the company attract investors, customers, and employees.
  • Easy Access to Funding: Private limited companies can issue shares to raise capital, making it easier to access funding from investors. Additionally, banks and other financial institutions are more likely to lend money to a private limited company than a sole proprietorship or partnership.
  • Tax Benefits: Private limited companies may be eligible for various tax benefits and exemptions, which can help the company save money and increase its profits.

 

How to Register a Company Online: The Registration Process

Company registration in India benefits start-ups since it offers them an advantage over those who have not registered. The process of registering your company is complex and involves many compliances. However, you needn’t worry as long as you have AMpuesto, as our professionals can help you with every step of the private limited company registration process.

 

  • Obtain Digital Signature
  • Apply for the DIN
  • Application for the name availability
  • Submission of MoA and AoA to register a private limited company
  • Apply for the PAN Card and TAN of the company
  • RoC issues a certificate of incorporation with a PAN and TAN

 

Prerequists for Private Limited Company Registration

The requirements for registering a private limited company are as stated below:

  • A minimum of two adult persons are required to act as directors of the company
  • Minimum of 2 directors and can have a maximum of 15 directors
  • One of the directors of a private limited company has to be an Indian citizen and Indian resident
  • The other director(s) can be foreign nationals
  • Two persons are required to act as shareholders of a company

 

Compliance relating Private Limited Company

As a private limited company, there are several compliance requirements that you need to fulfill. Here are some of the key compliance requirements:

  • Incorporation Compliance: When incorporating your private limited company, you need to ensure that you fulfill all the legal requirements, such as filing the necessary documents with the Registrar of Companies (ROC) and obtaining a Certificate of Incorporation.
  • Annual compliance: Private limited companies need to comply with various annual compliance requirements, such as filing holding an annual general meeting (AGM) and filing annual returns with the ROC.
  • Tax compliance: Private limited companies need to comply with various tax requirements, such as obtaining a permanent account number (PAN) and filing income tax returns. You also need to comply with Goods and Services Tax (GST) regulations if your business is involved in the supply of goods or services.
  • Statutory compliance: Private limited companies need to comply with various statutory requirements, such as maintaining proper books of accounts, issuing share certificates, and filing various forms with the ROC.
  • Corporate governance compliance: Private limited companies need to comply with various corporate governance requirements, such as appointing directors and auditors, maintaining board minutes, and ensuring proper internal controls and financial reporting.

Failure to comply with these requirements can result in penalties and legal repercussions. Therefore, it is important to ensure that you are aware of all the compliance requirements and fulfill them in a timely and accurate manner. You may also consider seeking the help of AMpuesto, to ensure that you are complying with all the requirements.

 

Key differences between a private limited company and other types of business structures

When starting a business, one of the key decisions you need to make is choosing the right business structure. Two popular business structures are private limited companies and sole proprietorships/partnerships. Here are some of the key differences between these structures:

  • Liability: One of the main differences between a private limited company and a sole proprietorship/partnership is the level of liability. In a sole proprietorship/partnership, the owner(s) have unlimited liability, which means that they are personally responsible for all the debts and obligations of the business. In a private limited company, the liability of the shareholders is limited to the amount of share capital they have invested.
  • Ownership: In a sole proprietorship, the business is owned and operated by a single individual. In a partnership, the business is owned and operated by two or more individuals. In a private limited company, the business is owned by the shareholders, who may or may not be involved in the day-to-day operations of the business.
  • Management: In a sole proprietorship, the owner is responsible for managing the business. In a partnership, the partners share the management responsibilities. In a private limited company, the management is handled by the directors, who are appointed by the shareholders.
  • Funding: Sole proprietorships and partnerships typically rely on the personal funds of the owner(s) for funding. Private limited companies, on the other hand, can raise funds by issuing shares to investors.
  • Compliance: Private limited companies are subject to more compliance requirements than sole proprietorships/partnerships. For example, private limited companies are required to hold annual general meetings, file annual returns, and maintain proper accounting records.

These are just some of the key differences between private limited companies and sole proprietorships/partnerships. When choosing a business structure, it is important to consider the specific needs of your business and seek the advice of a professional if necessary.

 

Frequently Asked Question

Yes, you can register your company at your home address. You just need to have electricity bill and a legal rent agreeement with the owner of the property. It is perfectly legal to register your company on your Home Address.

At least 2 directors are required for incorporating Pvt Ltd Company. If you are a single person then you can register One Person Company.

Company can carry those businesses which are mentioned in MOA. If company wants to do business outside the MOA then it needs to amend the same.

Yes, Audit is compulsory for Pvt Ltd Company from the first year itself.

Yes, You will get the Incorporation Certificate of your registered Pvt Ltd Company.

There are 2 forms which needs to be filed by a Pvt Ltd Company annually i.e, AOC 4 and MGT 7 every year. Other than this, Income Tax return needs to be filed by a Pvt Ltd Company annually and Director KYC.

Yes, PAN Card will be generated after incorporating your Pvt Ltd Company.

AMPUESTO will help you in registering your Pvt Ltd Company with the best possible registration which suits your business after discussion with you. You just need to simply complete the small form and our team will call you and help you in registering your Pvt Ltd Company in a very cost effective way.

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