Steps for Private Limited Company Registration
In India, the most common type of business entity is a private limited company. It is easy to maintain and raise funds, offers limited liability to its members, offers flexibility, easy bank loan accessibility. The registration procedure of a Private Limited Company is a little bit complex but can be done by following these simple steps mentioned below.
STEP 1: Obtain a Digital Signature Certificate (DSC)
The first step is to obtain DSC i.e Digital Signature Certificate for the directors involved in the private limited company. The board of directors or managing director of the private company needs to have their own DSC, as it is needed while filing e-forms and submitting tax returns. The DSC acts as a sort of verification or identification mark, allowing such personnel to authenticate documents being sent to the Government.
The cost of obtaining DSC differs depending upon the certifying agency. You must obtain either Class- 2 or Class- 3 category of DSC. Under Class- 2 category, the identity of a person is verified against a pre-verified database whereas, under Class- 3 category, the person needs to present himself before registering authority to prove their identity.
Documents Required for a Digital Signature Certificate:
- Passport-sized photo of the applicant
- Copies of the applicant’s address proof, self-attested
- PAN card self-attested by the applicant.
STEP 2: Apply for DIN (Director Identification Number)
DIN is an identification number for a director. It has to be obtained by anyone who wants to be a director in a company. One DIN is enough to be a director in any number of companies.
Documents Required for DIN:
- Passport-size photo of the applicant
- Self-attested copies of the applicant’s address proof
- PAN card self-attestation of the applicant
STEP 3: Name Approval
Before a company can file for incorporation, it needs to have a unique name for itself. To do so, the directors must submit an application asking to reserve a particular name for the private limited company via e-Form INC -1. The directors must ensure that the appropriate form is filled and that the required processing fees have been paid.
One single application can contain a maximum of 6 different names, ranked in order of their preference along with why the name is a good fit for the company. Government officials will then check the availability of each name and then approve or reject the application accordingly.
Most directors hire professionals to check the availability beforehand, to avoid any confusion later on. It is up to the Registrar of Companies to decide whether to approve or reject the application.
Principles for Naming a Private Limited Company:
- The name must be easy to remember, as well as spell
- It should provide the company with a unique identity
- The name must be short, simple, and creative
- Name must not contain within it any words which are derogatory or deemed unparliamentary
- It must not contain words that are offensive and prohibited
- It must not infringe any legal trademarks registered earlier
- The name cannot be similar or identical to any other company’s name.
If approved, the ROC reserves the name for 60 days, within which the company must apply for incorporation. If the company fails to do so, the name shall lapse and the entire process will have to be repeated, for the company to file its incorporation.
STEP 4: Form SPICe+ (INC-32)
The MCA has introduced Form SPICe+ for the registration of new companies from 23 February 2020. The incorporation under Part-B of the SPICe+ form is also web based and streamlines the incorporation of companies.
Upon the name approval, the applicant can click on the link of the approved name (available on the user’s dashboard) and continue to complete the incorporation. The Part-B of the new SPICe+ form enables the web based incorporation and serves the following purposes with the benefit of a single application:
- Application for allotment of DIN (Director Identification Number)
- Reservation of company name
- Incorporation of a new company
- Application for PAN and TAN (mandatory)
- Application for EPFO registration (mandatory)
- Application for ESIC registration (mandatory)
- Application for Professional tax registration (only for Maharashtra)
- Application for opening a bank account for the company (mandatory)
- Allotment of GSTN (Goods and Service Tax registration number) if applied for (optional)
The new SPICe+ form facilitates web based entries and real time validation of data making incorporation a seamless and quick process. The details filled in Part-A and Part-B of SPICe+ will be automatically filled in the linked forms AGILE-PRO, eAoA, eMoA, URC1, INC-9 (as applicable).
The digital signature of a professional is required to file Form INC-32. The professional must certify that all the information given in the form is correct. The professional can be Chartered Accountant, Company Secretary, Cost Accountant or advocate.
Prior to May 2015, the registration of companies required the filling up of several documents, such as the DIR–3 for acquiring the DIN (Director Identification Number), INC-1 for obtaining a name, INC–7 for registering the company with the Memorandum and Articles of Association, INC–22 for the registered office and finally, Form DIR-12 for the directors. With effect from January 2018, New Process of Name Approval “RUN” notified and e-form INC-1 omitted. INC-7 form omitted.
Now, all of these forms have been merged together in the SPICe+ form and RUN service is available only to change existing name. Only way out for incorporation of Company is SPICe+ form. No ROC fees for Incorporation of Company up to 10 lack of authorized capital.
STEP 5: e-MoA(INC-33) and e-AoA (INC-34)
e-MoA refers to an electronic Memorandum of Association and eAoA is electronic Articles of Association. These forms have been introduced to simplify the process of company registration in India.
Memorandum represents the charter of the company while articles of association contain the internal rules and regulations of the company.
Earlier memorandum of association and articles of association were required to be filed physically. But now these forms are filed online on MCA portal as a linked form with SPICe+ (INC-32). Both these forms must be digitally signed by subscribers to the Memorandum and Articles of Association.
STEP 6: PAN and TAN Application
Through this single form SPICe+, you can also apply for company’s PAN and TAN. The system will auto-generate these forms after the submission of SPICe+ form. The Certificate of Incorporation of PLC is issued with the PAN as allotted by the Income Tax Department after approval of the SPICe+ Form. An email containing the Certificate of Incorporation, PAN and TAN will be sent by the MCA. The Income Tax Department will issue the PAN card.
If all the details in the form are duly filled in along with the required documents, MCA will approve the registration and a CIN (Corporate Identity Number) will be allocated. You can also track this CIN online on MCA portal.
Documents Required for a private limited company registration:
- Share capital amount and proposed ratio for holding shares.
- A short description of the company and the business.
- Name of the city where the registered office of the company is located.
- Ownership and sale deed (In case your own premise).
- Identity proof of the Directors and Shareholders (PAN Card).
- Address proof of the registered office (Electricity bill, telephone bill, etc.)
- Address proof of the Director or the Shareholder (Voter ID, Passport, Driving license, etc.)
- A duplicate copy of the latest electricity bill, telephone bill, or mobile bill for directors.
- Occupation details of directors as well as shareholders.
- Email address of the directors and shareholders.
- Contact details of directors and shareholders.
- Passport size photo of directors and shareholders.
- In case the property is on rent then you need to submit a copy of the rent agreement with No Objection Certificate (NOC) from the landlord.
- Affidavits for non- acceptance.
- NOC for a change in the original subscribers of MOA.
- MoA and the AoA subscriber sheets.
- PAN Card of the company.
- In case you are a foreign national subscriber then you need to provide Nationality proof.
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Note: This Post was last updated on December 3, 2022
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