Private Limited Company

Government Issued Documents

Documents Required

Private Limited Company Registration

In India, company registration can be completed online through Digihunter.in company is the most common type of legal entity that is preferred by millions of Indian Entrepreneurs and popular startups like Flipkart, PhonePe and Swiggy. A private limited company can be registered online in less than 10 days at a very affordable price.

What is a Private Limited Company?

A Private Limited Company (PLC) is one of the most common types of legal entityin India. Private Limited Companies are governed by the Companies Act, 2013 and require a minimum of 2 Directors and 2 Shareholders with one of the Directors being an Indian Resident and Indian Citizen.

To register a company in India, the following are minimum requirements:

2 Directors – 1 Person should be an Indian National and Indian Resident
2 Shareholders – The Directors can be shareholders
Registered Office in India

100% Foreign Direct Ownership (FDI) is permitted in most sectors in India and there is no restriction on foreign shareholding of a private limited company. Hence, most foreign subsidiaries are established in India as private limited company.

Documents Required for Company Registration

The proposed directors of a private limited company must present the following documents as proof of identification in order to register a company:

Indian Nationals: PAN card mandatory

Foreign Nationals: Passport is mandatory

In addition to the above document, the Directors must submit one of the following documents that contain the address of the Director.

Indian Nationals: Passport / Driver’s License / Election ID / Ration Card / Aadhar ID

Foreign Nationals: Drivers License / Bank Statement / Residence Card

Finally, as proof of residency, the prospective Directors must produce one of the following documents. This document must have been generated within the last two months:

Indian Nationals: Bank Statement / Electricity Bill / Phone Bill

Foreign Nationals: Bank Statement / Electricity Bill / Phone Bill

If one of the company’s shareholders is a company based in India or abroad, the following documents must be submitted:

Board resolution authorizing investment in the company
Incorporation Certificate of the Company
Address proof of the company

Capital Required to Start a Company

A company can be started in India with a very minimum amount of capital. There is no fixed amount and the shareholders of the company being incorporated can determine the capital they wish to contribute. While setting up the capital structure of the company, the following are some of the concepts to be kept in mind:

Face Value of Share: The face value of a share is the price per share with which the company is incorporated. Normally, the face value of share is Rs. 1 or Rs. 10 or Rs. 100 or Rs. 1000 or Rs. 10,000.

Authorised Capital: Authorised capital is the total value of shares a company can issue to shareholders. Normally, all companies are incorporated with an authorized capital of Rs. 1 lakh or Rs. 10 lakhs. If a higher authorized capital is required, the company would be required to pay additional fees to the Ministry of Corporate Affairs. The authorised capital of a company can be increased at any time after incorporation.

Paid-up Capital: Paid-up capital of a company is the number of shares issued to shareholders for which they have paid or deposited money to the company. Paid-up capital of a company cannot be more than the authorized share capital of the company.

Company Registration Process

The following are the steps involved in registering a company in India:

Step 1: RUN Name Approval

An application for company name approval is first submitted to the Ministry of Corporate Affairs to reserve the company name. In the name approval application, 1 or 2 names with business objectives can be submitted. If a name approval is rejected, 1 or 2 more names can be resubmitted. Normally, the MCA approves all name approval applications in less than 5 working days.

Step 2: Digital Signature for Directors

In India, the Ministry of Corporate Affairs does not allow wet signatures. All signatures for filings with the MCA must be completed with a digital signature that is issued by a Certification Authority in India. Hence, digital signatures are mandatorily required for the Directors before incorporation.

Digital signature for the Directors will be obtained through an Authorized Certifying Authority by Digi Hunter. To obtain Digital Signature, the Directors will have to submit a copy of their identity proof and complete a video KYC process. If the Director is a foreign national, the passport and other documents submitted must be apostilled by a local embassy.

Private Limited Company Compliances

Once a company is registered in India, various compliances must be maintained from time to time to avoid penalties and prosecution. The following are some of the compliances a company would be required to complete after company registration:

Auditor Appointment: All companies registered in India must appoint a practicing and licensed Chartered Accountant registered with the ICAI within 30 days of incorporation.

Director DIN KYC: All persons who hold a Director Identification Number (DIN) – which is allocated during the incorporation process must complete DIN KYC each year to validate the phone and email address on record with the Ministry of Corporate Affairs.

Commencement of Business: Within 180 days of incorporation, the company must open a Bank Current Account and the shareholders must deposit the subscription amount mentioned in the MOA of the company. Hence, if the company was to be incorporated with a paid-up capital of Rs. 1 lakh, then the shareholders must deposit Rs. 1 lakh in the Company’s bank account and file the bank statement with the MCA to obtain a commencement of business certificate.

MCA Annual Filings: All companies registered in India must file a copy of the financial statements with the Ministry of Corporate Affairs each financial year. If a company is incorporated between January – March, the company can choose to file the first MCA annual return as a part of the next financial year’s annual filing. MCA annual return consists of Form MGT-7 and Form AOC-4. Both these forms must be digitally signed by the Directors and a practising professional.

Income Tax Filing: All companies must file an income tax return using Form ITR-6 each financial year. Income tax filing must be done for each financial year before the due date – irrespective of the incorporation date. The income tax return of a company must be digitally signed using one of the Director’s digital signature.

FAQ's

1. What is the registration process of a company?

The registration process of a company is done under the Ministry of Corporate Affairs (MCA) in accordance with the Companies Act 2013.

Step 1: Apply For Director Identification Number (DIN)
Step 2: Apply For Digital Signature Certificate (DSC)
Step 3: Company Name Approval
Step 4: Company Incorporation Application Submission
Step 5: Get a Certificate of Incorporation

2. How much does it cost to register a company?

The cost of registering a company in India varies according to the number of stakeholders and size. The Cost of Incorporation of a private limited Company would vary from Rs.6, 000 – to Rs. 30,000/- depending upon the following:

Number of Directors
Number of Members
Authorized share capital
Professional fees

3. What are the types of registration?

Company registration is mandatory in India to start any business, so fixing the business structures is crucial. In India, there are seven different types of company registration:

Sole Proprietorship Registration
One-person Company Registration
Partnerships Firm Registration
Limited Liability Partnership (LLP) Company Registration
Private Limited Company Registration
Public Limited Company Registration
Section 8 Company Registration

4. Can NRIs or foreign national or foreign entities register a company in India?

Yes, NRIs, foreign nationals, and foreign entities can register a company and invest in India, subject to the Foreign Direct Investment norms set by the RBI. However, incorporation rules in India require for one Indian national to mandatorily be a part of the company on the Board of Directors.

5. How do I check the availability of names for my company?

You can use the IndiaFilings company name availability search tab to search for available names in India. It is important to note that IndiaFilings would just provide available choices, based on identical names already registered.

Related Business Registrations

In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.