4 Step Process To Register A Private Limited Company In India
Most new entrepreneurs choose to register a private limited company in India to provide a legal structure to their business. There are various benefits of establishing a business set-up in India in this manner. Such companies are treated as separate legal entities as compared to its members and enjoy the advantage of limited liability protection. This means that the liabilities like debt repayments and lawsuit settlement lie with the company and not with its owners. These organizations also provide the benefit of perpetual succession meaning they will continue to exist even if their members die or are rendered unfit to discharge their duties. Let’s take a look at how a private limited company can be registered in India.
1. Acquire Digital Signature Certificate And Director Identification Number
The first step for people setting up a company in India is to acquire a Digital Signature Certificate (DSC). The registration process is online and the forms need to be signed with a digital signature. All the promoters and the directors of the proposed venture must possess DSCs. The application for DSC must be accompanied by passport-size photographs of the applicant and self-attested copies of PAN card and address proof. The proposed directors of the new company must also apply for the Director Identification Number (DIN). It is a unique number assigned by the Ministry of Corporate Affairs and comes with lifetime validity. The documentary requirements needed to be furnished with the DIN application are the same as that of the DSC application.
2. Reserve A Unique Name For The Company
One of the most important parts of company formation is to reserve a name for the new entity. In order to create a distinct brand identity, it is essential that a unique name which is not being used by any other organization is chosen. The availability of the desired name can be checked by filling a form along with the prescribed fees at the government’s Reserve Unique Name (RUN) service. Users must be fully sure about a selected term as there are no second chances for registering a name for the new enterprise. Once approved, the name is reserved in the name of the applicant for a duration of 20 days.
3. Obtain MoA, AoA, And Other Documents
Entrepreneurs looking to register a private limited company in India must draft the Memorandum of Association (MoA) and the Articles of Association (AoA) of their organization. The MoA lists the objective of forming the new enterprise and its business activities. The AoA contains the rules and regulations which will govern the organization’s activities and administration. Both the documents must be submitted through forms e-MoA(INC-33) and e-AoA (INC-34). The additional documents which must be provided by the applicant are:
-Passport size photos of the directors and shareholders
-ID Proof of directors and shareholders: Self-attested copy of Aadhar card and Voter ID/ Passport/ Driving License. Foreign nationals must furnish a valid passport.
-Address Proof of directors and shareholders: Self-attested Latest Utility Bill/ Bank Account Statement
-Business Address Proof: Utility Bill for the registered office address, No Objection Certificate (NOC) from the owner of the property. In case, the property is not owned by director/shareholder, rent agreement must be provided.
-Form INC-9: Declaration by first subscribers and directors
-Form DIR-2: Consent to act as a director
4. Apply For The Registration
The application for company incorporation must be made through the e-form SPICe within 20 days of name reservation. It is a consolidated form which enables users to submit applications for DIN as well as the firm’s PAN and TAN. No application fees will be charged if the new entity has a share capital up to Rs 10 lakhs or less than 20 members. The Certificate of Incorporation (CoI) will be issued by the Registrar of Companies if he/she is satisfied with the application.
This simple guide to register a private limited company in India will be useful for all entrepreneurs in easily negotiating the incorporation procedure and starting their business venture.