All about Private Limited Company Incorporation
You are going to open up a business and wondering about opening up a Private Limited Company?
This quick guide will help you understand the advantages, documents and processes involved in incorporation.
A private limited company is a company privately held for small businesses. This type of business entity limits owner liability to their shareholdings, the number of shareholders to 200, and restricts shareholders from publicly trading shares.
Advantages of becoming Private Limited Company
1.??????Separate Legal Entity-
A company as a legal entity is capable of owning its fund and other properties. The property of the company is not the property of its shareholders. A company is a separate legal entity from its Directors and Shareholders. Hence, a company enjoys a wider legal capacity, to own property and incur debts - while the individual company members owe no liability towards the company’s creditors for debts.
2.??????Raising Loans and Funds-
A company is the only type of legal entity which can help the promoters raise equity funding from Angel Investors, Venture capitalists, Private Equity Firms and the Stock Exchange.?So if you are a Startup, don't think twice before incorporating the private limited company.
3.??????Limited Liability-
Limited liability is a legal responsibility towards a limited amount of debts. This limited liability protection is often not afforded to Directors of a company - who are held responsible for the operation of a company. In a private limited company, only investment in the business is lost, personal assets of the directors are safe.
4. No limit on the salary of founders -
When compared to partnership firms or limited liability partnership firms, there is no capping on the salary allowance of founders/directors.
4.?????Taxation-
Companies are often taxed at a lower rate and are provided with better taxable benefits as compared to other forms of business organisation.
5.??????Helpful in Start-up India Registration-
Under the Start-up India scheme, you can avail a lot of the benefits like raising the funds, subsidy for the trademark registration etc.
6.??????Transferable Ownership-
It is easier to subscribe or leave the membership of the company. Also, it is easier to transfer ownership. The easy transferability of shares is one of the top reasons, Entrepreneurs opt to register a company.
7.??????Perpetual Succession-
A company is considered to be legally active until it is wound up by its members through a legal process. Hence, perpetual succession denotes the continuous existence of a corporation or company till it is dissolved legally.
8.?????Selling the Business-
As a business corporation value will be based on the business, not the owner, therefore making it easy to sell the company. Private Limited Company is easy to sell, very little documentation and cost is involved in selling a company.?
Minimum Requirements for Company incorporation-
How can Nucleus be helpful in this activity?
We have helped hundreds of businesses to incorporate as a Private Limited Company. Our team of Chartered Accountants, Company Secretaries works hand in hand with you at all steps throughout the process. Beneath is the process we follow:
3. ROC Filing: Your documents will be filed and submitted to the ROC.
4. Get Deliverables: Congratulations you have registered your company. Get your Company Incorporation Certificate and other below mentioned documents:
FAQ
?How to register a Private Limited Company?
?Registering a company in India is very simple. First, file an application for both “DSC and DIN” and when your application gets approved, you will receive a “certificate of Incorporation”?
If you still require help registering your company, don’t stress over it, and allow our team of experts to guide you.
What is Authorized Capital and Paid-up capital?
?The authorised capital is the maximum value of equity shares that can be issued by a company. On the other hand, paid-up capital is the number of shares issued by the company to shareholders. Authorised capital can be increased any time after incorporation to issue additional shares to the shareholders.
?What is a Digital signature?
A digital signature is an electronic signature used for signing the forms filed with ROC for incorporation of the Company. Digital signatures provide validity to the signature.
A digital signature is just like a hand signature, but only in this case, it is used to affix with computerized reports.
What is DIN?
DIN is a unique identification number allotted by the Ministry of Corporate Affairs to an individual, who is appointed as a Director in a Company, and it is mandatory for all companies in order to create a database of the incorporated companies.
Is an address required in India to start a company?
Yes, every company registered in India must have a registered office where all official communication is sent by the MCA, governmental agencies, financial institutions, etc., The registered office of a company can be in any state of India.
Do I need to be physically present for the incorporation of the company?
The whole process is online. So, a person needn’t go anywhere to register it. You are required to send in your documents via email and fill up our questionnaire to get it done.
What is the MOA & AOA of the company?
MOA stands for Memorandum of Association and it reveals the name, aims, objectives, registered office address, the clause regarding limited liability, minimum paid-up capital and share capital of a Company. AOA stands for Articles of Association and it contains the regulations for the management of the company.?
What is Limited Liability protection?
Limited liability is the status of being legally responsible only for a limited amount for debts of a company. Unlike proprietorships and partnerships, the liability of the shareholders with respect to the company’s liabilities is limited.
Who can be a Director in a Company?
Any person over the age of 18 years can become a director in a company. Also, there are no conditions on residency or citizenship. Hence, NRIs and Foreign Nationals can easily start and manage a private limited company in India.
How do I check the availability of names for the company?
The company name should be Unique. It should not be similar to any existing company. It is important to note our experts would provide you with available choices, based on identical names already registered.
What is the process of Company registration?
Step 1: Obtaining Digital Signature (DSC)
Step 2: Application of DIN
Step 3: Name approval
Step 4: Drafting of MOA & AOA
Step 5: Form Spice+
Step 6: PAN and TAN application
Is GST registration mandate at this Stage?
GST applicability is the same for all types of businesses like a sole proprietorship, partnership firms and companies.?These laws are applicable only after crossing certain threshold limits. GST registration takes just 5-7 working days.
Can I introduce Foreign National as a Director?
Yes, provided that he or she has to apply for DIN from the Government of India.
Are there any hidden charges involved for registration?
No, there are no extra charges, except Govt stamp duty and Name reservation fee are involved.