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Private Limited (PVT LTD)/ Limited (LTD) Company Registration

Establishing a Private Limited Company or Public Limited Company - A Step-by-Step Guide
Pvt Ltd Ltd Company Registration

    Are you ready to register your private limited or limited company? Look no further, as Tax Mother is here to assist you every step of the way during the registration process.

    Don’t hesitate to reach out to us today for expert guidance and a seamless, hassle-free Pvt Ltd or Ltd company registration experience.

    The Advantages of Limited and Private Limited (Pvt Ltd) Companies

    For expert assistance and professional advice, contact Tax Mother today!

    Limited and Private Limited Companies (Pvt Ltd) offer entrepreneurs and investors a multitude of benefits, including limited liability, operational flexibility, and a secure business structure. Moreover, these entities provide separate legal entities that effectively safeguard shareholders’ personal assets. In this article, we will thoroughly explore the advantages of these company structures, delve into the registration process, and shed light on the opportunities they present for fostering business growth.

    Private Limited Company: Combining the advantages of limited liability and operational flexibility, a Private Limited Company (Pvt Ltd) offers a separate legal entity that protects shareholders’ personal assets. With perpetual succession and privacy benefits, establishing a Pvt Ltd Company provides a secure and structured environment for business growth. Entrepreneurs and investors appreciate the protection this structure offers, ensuring their personal assets remain separate from the company’s liabilities.

    Contact Mother Tax for hassle-free Pvt Ltd Company registration.

     

    Limited Company: An Ltd Company, as a separate legal entity, provides limited liability to its shareholders, safeguarding their personal assets in case of business debts or legal issues. Ltd companies have the ability to issue and trade shares, facilitating capital raising and establishing credibility. Entrepreneurs and investors often prefer registering an Ltd Company due to its ownership flexibility and perpetual succession. By preparing the necessary documents and obtaining a Certificate of Incorporation, individuals can benefit from the secure business structure provided by Ltd companies.

    Talk to our experts for smooth Ltd Company registration.

    Advantage of Private Limited Company

    Privacy and Flexibility
    1. Limited Liability: Shareholders of a private limited company have limited liability. This means that their personal assets are protected in case of company debts or legal issues.
    2. Minimum Directors: A private limited company must have a minimum of two directors who are responsible for the management and decision-making processes.
    3. Minimum Members/Shareholders: A private limited company should have at least two members or shareholders, with a maximum limit of 200.
    4. No Minimum Capital Requirement: Private limited companies do not have a mandatory minimum capital requirement for registration.
    5. Perpetual Existence: A private limited company has perpetual existence, meaning it continues to exist even if there are changes in ownership or management.

    Eligibility Criteria for Private Limited (Pvt Ltd) Company Registration

    To be considered a private limited company (Pvt Ltd) according to the Companies Act of 2013, an enterprise must meet the following criteria for registration:
    1. When setting up either a Limited or Private Limited Company in India, certain requirements and guidelines must be adhered to:

      1. Director Requirement: The company must have a minimum of two directors, and it cannot exceed fifteen directors.

      2. Residency Criteria: At least one director must be a resident of India.

      3. Shareholder Count: The company should have a minimum of two shareholders, but it cannot exceed 200 shareholders.

      4. Authorized Capital: A minimum authorized capital of ₹1,00,000 is required to register the company.

      5. Registered Office: The registered office address of the company must be located within India.

      By ensuring compliance with these essential criteria, entrepreneurs can successfully register their Limited or Private Limited Companies in India.

    Documents Required for Private Limited (Pvt Ltd) Company Registration

    To successfully register a private limited (Pvt Ltd)company, you will need the following essential documents:
    1. PAN cards of all company directors.
    2. Electricity and water bills of the company as address proof.
    3. Passport size photo IDs of all directors.
    4. Directors’ Aadhaar card or Voter ID card for identification.
    5. Property documents (if owned) or rental agreements (if rented).
    6. Authorization letter from the landowners (if rented).

    Step-by-step Guide to Private Limited Company Registration Process

    To register your private limited company, follow this step-by-step process:

    To successfully register your Limited or Private Limited Company in India, follow these steps with the corresponding transition words:

    1. Obtain Digital Signature and DPIN: First, the directors should apply for a digital signature and DPIN (Director PIN) assigned by the Ministry of Corporate Affairs (MCA).

    2. Name Approval: Next, select three suitable names for your company and provide them to the MCA. The MCA will choose one of the names based on availability and compliance.

    3. Memorandum of Association (MOA) and Articles of Association (AOA): After name approval, prepare and submit the MOA and AOA, which outline the company’s objectives, rules, and regulations.

    4. Obtain Company Establishment Certificate: Once the MOA and AOA are approved, you will receive a company establishment certificate. This certificate serves as legal proof of your business entity and includes a Corporate Identification Number (CIN) assigned to your company.

    5. Apply for PAN, TAN, and Bank Accounts: Lastly, apply for a Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), and bank accounts for your company. Submit the necessary documents, including the MOA, AOA, and PAN.

    By following these steps in a systematic manner, you can successfully register your company and start your business operations in India.

    Advantage of Public Limited Company

    Access to Capital and Growth Potential
    1. Separate Legal Entity : A Public Limited Company is a distinct legal entity from its shareholders, providing protection and limited liability by separating company liabilities from personal assets.
    2. Transferability of Shares : Public Limited Company allow shareholders to freely trade shares on stock exchanges, enhancing liquidity and attracting investors.
    3. Perpetual Succession : Public Limited Company enjoy continuity even with changes in members or directors, ensuring stability and facilitating long-term planning and growth.
    4. Minimum Paid-up Capital : A Public Limited Company must have a minimum paid-up capital of at least ₹15,00,000, establishing a solid financial foundation for operations.
    5. Inclusion of “LTD” in Company Name : A Public Limited Company must include “LTD” in its name, clearly identifying it as a public limited entity.
    6. Minimum Director and Member Requirements : A Public Limited Company requires a minimum of three directors and seven members to establish and manage the company effectively.
    7. Annual Prospectus Requirement : Public Limited Company must prepare and file an annual prospectus that provides essential information about the company’s performance, objectives, and future plans, aiding investors in making informed decisions.

    Eligibility Criteria for Public Limited Company Registration

    To form a public limited company, you must meet these requirements:

    When establishing a Public Limited Company, ensure the following steps and requirements are met, along with the addition of appropriate transition words:

    1. Meet the prescribed minimum authorized share capital set by the Companies Act.

    2. Have at least seven shareholders, with no maximum limit.

    3. Have a minimum of three directors for effective management and decision-making.

    4. Offer shares to the general public for trading on a recognized stock exchange, complying with additional regulations.

    5. Prepare and file a detailed prospectus when issuing shares to provide investors with necessary information.

    6. Fulfill legal obligations, such as filing reports, holding meetings, maintaining records, and following corporate governance standards.

    By complying with these essential steps and requirements, your Public Limited Company can thrive in the market and attract public investment.

    Required Documents for Public Limited Company Registration:

    The registration documents for a Public Limited Company are similar to those for a private limited company. The following documents are required:
    1. Memorandum of Association (MOA) : The MOA outlines the company’s objectives, scope of activities, and shareholder rights and liabilities.
    2. Articles of Association (AOA) : The AOA specifies internal rules, regulations, and procedures for running the company, including director and shareholder roles and responsibilities.
    3. Form INC-7 : This form includes details about directors, shareholders, registered office address, and paid-up capital.
    4. Form INC-22 : Form INC-22 provides information about the registered office address, including proof of address.
    5. Form DIR-12 : Form DIR-12 is used to appoint directors and obtain their consent to act as directors in the company.

    Step-by-step Guide to Public Limited Company Registration Process

    To register your public limited company, follow this step-by-step process:
    1. Confirm Minimum Requirements : Ensure the company meets the minimum requirements of at least seven shareholders, three directors, and a minimum paid-up capital of ₹5,00,000.
    2. Obtain Digital Signature Certificate (DSC) : Apply for a Digital Signature Certificate (DSC) from a licensed certifying authority to establish identity and address proof.
    3. Apply for Director Identification Number (DIN) : Obtain a Director Identification Number (DIN) for each director by submitting Form DIR-3 online. This unique number is mandatory for Indian company directors.
    4. Choose and Reserve a Company Name : Select a unique and appropriate name for the Public Limited Company. Check name availability and reserve it using the Ministry of Corporate Affairs (MCA) portal by filing Form INC-1.
      Draft Memorandum and Articles of Association: Prepare the MOA and AOA, ensuring compliance with the Companies Act and other relevant laws while clearly stating the company’s objectives, scope of activities, and internal regulations.
    5. File Required Forms : Submit the necessary forms, including Form INC-7, Form INC-22, and Form DIR-12, along with the MOA and AOA, electronically to the Registrar of Companies (ROC) through the MCA portal.
    6. Pay Registration Fee : Make the required payment for registration and stamp duty through the MCA portal using the prescribed modes of payment.
    7. Obtain Certificate of Incorporation : After verifying and approving the submitted documents, the ROC will issue the Certificate of Incorporation, legally confirming the company’s existence.
    8. Apply for Commencement of Business : File Form INC-20A to declare the commencement of business operations after obtaining the Certificate of Incorporation.

    A Detailed Comparison Between Companies

    Basis Proprietorship Firm Partnership Firm Private Limited Company Public Limited Company Limited Liability Partnership
    Prevailing Law No specific law Indian Partnership Act, 1932 Companies Act, 2013 Companies Act, 2013 Limited Liability Partnership Act, 2008
    Capital Required No minimum amount No minimum amount No minimum amount (Standard 1 Lakh for Pvt. Ltd. Company) Minimum authorized and subscribed capital required No minimum amount
    Name of Entity Any name as per choice Any name as per choice Name to contain ‘Private Limited’ as suffix Name to contain ‘Limited’ as suffix Name to contain ‘Limited Liability Partnership’ or ‘LLP’ as suffix
    Procedure KYC of Proprietor KYC of All Partners KYC of All Directors KYC of All Directors KYC of All Partners
    Apply Tax Registration Prepare, Sign & Notarize Partnership Deed Apply for Digital Signature of Directors Apply for Digital Signature of Directors Apply for Digital Signature of Partners
    Approval and Ready Apply to Registrar of Firms Apply for DIN of Directors Apply for DIN of Directors Apply for DIN of Partners
    Apply Pan Card Apply for RUN for Name Approval Apply for RUN for Name Approval Apply for Name Approval with Form 1
    Approval, Pan Generated & Ready Prepare MOA, AOA & Other Incorporation Documents Prepare MOA, AOA & Other Incorporation Documents Prepare Partnership Agreement & Other Incorporation Documents
    File SPice+ with MCA File SPice+ with MCA File Form 2 & 3 with MCA
    Approval with COI, PAN, TAN & GST Approval with COI, PAN, TAN & GST Approval with COI, PAN, TAN & GST
    Pre-Approval of Name Not Required Not Required Required Required Required
    Registration Any Tax Registration will suffice Optional with Registrar of Firms Registration with Registrar of ROC required (MCA) Registration with Registrar of ROC required (MCA) Registration with Registrar of LLP required (MCA)
    Creation N/A (Not a separate legal entity) Created by contract with 2 persons Created by Law Created by Law Created by Law
    Distinct Entity Not a separate legal entity Not a separate legal entity Is a separate legal entity under the Companies Act, 2013 Is a separate legal entity under the Companies Act, 2013 Is a separate legal entity under the Limited Liability Partnership Act, 2008
    Compliance Complexity Minimal Moderate High High Moderate
    Number of Directors Not applicable Not applicable Minimum 2 Directors Minimum 3 Directors Minimum 2 Designated Partners
    Statutory Audit Requirement Not applicable Not applicable Applicable (based on turnover and other thresholds) Applicable (based on turnover and other thresholds) Applicable (based on turnover and other thresholds)
    Mandatory Annual Filings No Annual Filings required No Annual Filings required Mandatory (Annual Returns, Financial Statements, etc.) Mandatory (Annual Returns, Financial Statements, etc.) Mandatory (Annual Returns, Financial Statements, etc.)
    Ownership Transferability Not possible Not possible Possible Possible Possible
    Foreign Ownership Not allowed Allowed Allowed Allowed Allowed
    Admission as Partner/Member Not applicable By agreement By agreement By agreement By agreement
    Annual Filing Not applicable Not applicable Yes Yes Yes
    Cessation as Partner/Member Not applicable By agreement By agreement By agreement By agreement
    Charter Document Not applicable Partnership Deed Memorandum of Association and Articles of Association Memorandum of Association and Articles of Association LLP Agreement
    Common Seal Not applicable Optional Optional Mandatory Not applicable
    Compliances Few Moderate More More Moderate
    Contracts Personal liability Joint liability Limited liability Limited liability Limited liability
    Credit Worthiness of Organization Personal credit Partners’ credit Separate entity’s credit Separate entity’s credit Separate entity’s credit
    Digital Signature Not applicable Not applicable Required for filing Required for filing Required for filing
    Director Identification Number Not applicable Not applicable Required for directors Required for directors Not applicable
    Dissolution Not applicable By agreement By legal process By legal process By agreement
    Dividend Distribution Tax Not applicable Not applicable Yes Yes Not applicable
    Formalities of Incorporation Not applicable Not applicable Required Required Required
    Legal Proceedings Personal liability Joint liability Limited liability Limited liability Limited liability
    Liability of Partners/Members Unlimited Jointly and severally Limited Limited Limited
    Maintenance of Minutes Not applicable Not applicable Required Required Not applicable
    Number of Members Single owner Minimum 2 Minimum 2 Minimum 7 Minimum 2
    Oppression and Mismanagement Not applicable Applicable Applicable Applicable Applicable
    Ownership of Assets Personal ownership Joint ownership Company ownership Company ownership LLP ownership
    Perpetual Succession Not applicable Not applicable Yes Yes Yes
    Principal/Agent Relationship Not applicable Partners act as agents Directors act as agents Directors act as agents Partners act as agents
    Share Certificate Not applicable Not applicable Issued to shareholders Issued to shareholders Not applicable
    Statutory Meetings Not applicable Not applicable Required Required Not applicable
    Tax Liability Individual tax rates Partnership tax rates Corporate tax rates Corporate tax rates Partnership tax rates
    Transfer of Share/Partnership rights in case of death Not applicable By agreement By transfer of shares/partnership interest By transfer of shares/partnership interest By agreement
    Voting Rights Not applicable As per agreement Proportional to shareholding Proportional to shareholding As per agreement
    Accounting Standards Personal discretion Partners’ discretion Required by law Required by law Required by law
    Annual Compliance Cost Low Moderate High High Moderate
    Audit of Accounts Not applicable Not applicable Required Required Required
    Board Meetings Not applicable Not applicable Required Required Not applicable
    Books of Account Personal records Partnership records Mandatory Mandatory Mandatory
    Borrowing Personal capacity Joint capacity Limited capacity Limited capacity Limited capacity
    Conversion Not applicable Possible Possible Possible Possible
    Foreign Member Not applicable Possible Possible Possible Possible
    Foreign Participation Not applicable Possible Possible Possible Possible
    GST Applicability & Rates Personal capacity Partnership capacity Corporate capacity Corporate capacity Partnership capacity
    Income Tax Individual tax rates Partnership tax rates Corporate tax rates Corporate tax rates Partnership tax rates
    Legal Status Personal Joint Separate legal entity Separate legal entity Separate legal entity
    Liability Limitation No Joint liability Limited liability Limited liability Limited liability
    Managerial Personnel Not applicable Not applicable Required Required Not applicable
    Merger-Amalgamation Not applicable Not applicable Possible Possible Not applicable
    Min vs Max No of Directors 1 to N/A 2 to N/A 2 to 15 3 to 15 2 to N/A
    Min vs Max No of Shareholders/Members 1 to N/A 2 to N/A 2 to 200 7 to unlimited 2 to N/A
    Min vs Max Revenue/Year N/A N/A Varies Varies N/A
    Name Approval Not applicable Not applicable Required Required Required
    Owners Remuneration Personal discretion As per agreement Permissible Permissible Permissible
    Remuneration of Managerial Personnel Not applicable Not applicable Regulated Regulated Not applicable
    Start Up India Not applicable Not applicable Eligible Eligible Not applicable
    Startup Accreditation Not applicable Not applicable Eligible Eligible Not applicable
    Transfer/Inheritance of Rights Not applicable By agreement By transfer of shares/partnership interest By transfer of shares/partnership interest By agreement
    Transferability Not applicable By agreement By transfer of shares By transfer of shares By agreement

    Looking for your private limited pvt ltd or limited ltd company registration? Tax Mother is here to assist you every step of the way. Reach out today for expert guidance and a hassle-free registration experience.