Private Limited Company Registration In India
A private limited company is one of the most common forms of business entities in India. It offers limited liability protection to its shareholders while providing them with flexibility in operations. Here are some key features and characteristics of a private limited company in India:
- Limited Liability: One of the significant advantages of a private limited company is limited liability. The liability of shareholders is limited to the amount unpaid on their shares. In case of any financial losses or legal liabilities incurred by the company, the personal assets of the shareholders are generally protected.
- Number of Members: A private limited company must have a minimum of two shareholders, and the maximum number of shareholders is limited to 200. This makes it suitable for small and medium-sized businesses.
- Minimum Directors: A private limited company must have a minimum of two directors, and at least one of them must be a resident of India. The same person can act as both a director and a shareholder.
- Name of the Company: The name of a private limited company must end with the words “Private Limited” or “Pvt. Ltd.”
- Ownership and Shareholding: The company’s share capital is divided into shares, and the shareholders’ ownership is determined by the number of shares they hold. Shareholders’ rights are proportionate to their shareholding.
- Transferability of Shares: The shares of a private limited company are generally not freely transferable. Share transfers are subject to the provisions mentioned in the company’s Articles of Association and require the consent of other shareholders.
- Statutory Compliance: Private limited companies in India are required to comply with various statutory and regulatory requirements, including filing annual returns with the Registrar of Companies (RoC), conducting regular board meetings, and maintaining proper accounting records.
- Increased Credibility: Having a private limited company structure can enhance the credibility and trustworthiness of a business, making it more attractive to potential customers, partners, and investors.
- Separate Legal Entity: A private limited company is a separate legal entity from its shareholders. It can own assets, enter into contracts, and sue or be sued in its name.
- Taxation: Private limited companies are subject to corporate income tax rates applicable to companies in India. The tax rates and benefits may vary based on the turnover and business activities.
Document requirements to register a Private Limited Company
- Self-attested copy of identity proof of all the Directors and Shareholders. Any one of the following can be used as proof of identification.
- Self-attested PAN card copy
- PAN card
- Aadhar card
- Driving license
- Passport
- Address proof of all the directors and shareholders. Any one of the following can be used as company address proof:
- Latest telephone bill (not older than 2 months)
- Latest electricity bill (not older than 2 months)
- Bank account statement showing address
- Director Identification Number (DIN) and Digital Signature Certificate (DSC) of the Directors.
Documents Required for Foreign Nationals
- Passport is mandatory
- Self-attested copy of any one of the Identity Proofs Driving license/ Bank Statement/ Residence Card
- Self-attested copy of any one of the Addresses Proof like Bank Statement / Electricity Bill / Phone Bill
- Board resolution authorizing investment in the company
- Incorporation Certificate of the Company
- Address proof of the company
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