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What is Private limited company?
In India, the most common type of “legal structure” is a private limited company. A Private Limited Company Registration in India is governed by the Ministry of Corporate Affairs and is incorporated under the Companies Act of 2013. It is legally distinct from its owners. It is widely used because it provides numerous benefits to its directors, such as limited liability, which means that if the company defaults, bank/creditors can only sell the company’s assets and not the directors’ personal assets. Starting a business in India is a pipe dream unless you have a proper business entity to back it up.
Everyone, from veterans to novices, from budding start-ups to established entrepreneurs, and from north to south India, regard it as the best business entity. You can use our services to register your Private Limited Company. We have served clients from major cities throughout India for Private Limited Company Registration.
MRLLP team of knowledgeable and efficient experts is always available to help and advise you on the process of forming a Private Limited Company. MRLLP is a leading business startup consultant in India, offering a wide range of company registration services.
Documents Required For Company Registration
Self-attested PAN card from each prospective partner is required for the Private Limited Company Registration Process.
Self-attested passports, election cards or voter identification, Aadhaar cards, or any other form of identity verification acceptable for Indian citizens and required for Private Limited Company Registration Documentation.
The most recent electricity or telephone or gas or mobile or other utility bills from the company’s location that are less than two months old can be used as proof of the registered office address.
Also included are the most recent two passport-size photos.
All directors and members must submit two months’ worth of bank statements.
Procedure of GST Registration
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Private Limited Companies Registration Process
Submit an application for the reservation of the Company's name via Spice PART. A form that can be accessed through the MCA portal.
Selecting an appropriate name for the Private Limited Company. Pvt.ltd name suggestions can also be obtained from Mrllm Registration experts.
After receiving the application, the MCA will either approve or reject it within 3-4 days.
If the name is approved, the MCA will send us a name permission letter, and we must register the company within 20 days.
To extend the grace period before the 20-day grace period expires, an additional fee must be paid.
To get the DSC of the company's directors which will aid in the authentication of documents uploaded online.
Using SPICE PART B, electronically draught the company's MOA and AOA.
Submitting an online application to form a Private Limited Company.
The application will be evaluated by the Govt Ministry of Corporate
Affairs.
A Certificate of Incorporation, PAN, and TAN will be issued by the department upon the formation of a company.
Private Limited Companies Registration Process
There is no minimum capital requirement to form a Private Limited Company, and it can be registered with as little as Rs. 10,000 in total Authorized Share capital.
A Private Limited Company is a separate legal identity in the eyes of the law, which means that the assets and liabilities of the business are distinct from the assets and liabilities of the Directors. A juristic person is someone who isn't a natural or human being.
Because they can claim corporation tax relief on their profits, private limited companies are tax efficient. This can result in significant savings for businesses and increased profits, as well as capital allowances and R&D tax credits. Dividends paid by private limited companies to their shareholders are taxed at a lower rate.
If the name is approved, the MCA will send us a name permission letter, and we must register the company within 20 days.
The status of being legally responsible only for a limited amount of a company's debts. As a result, where a company is limited by shares, the members' liability on a winding-up is limited to the amount unpaid on their shares. For example, if a Private Limited Company takes a loan and is unable to repay it, the members are only obligated to pay the amount they own towards their own shareholding, i.e. the unpaid share value. This means that if you have no balance payable on the number of shares you own, you are not liable to the company for any debt or credit amount that remains unpaid.
A shareholder's shares in a company limited by shares are transferable to any other person. When compared to the transfer of an interest in a business run as a sole proprietorship or partnership, the transfer is simple. Transferring shares is as simple as filling out and signing a share transfer form and handing over the buyer's shares along with the share certificate.
Due to the flexibility to set up an unlimited number of bank accounts, income and expense items, and other features, many online accounting software suppliers have integrated into their systems as private limited companies have risen in popularity. These include submitting annual returns and reports to Companies House, holding shareholder meetings, and maintaining accurate company records.
As a legal person, a corporation can acquire, own, enjoy, and alienate property in its own name. As long as the company is in business, no shareholder can make a claim on its assets.
Suing means to initiate legal proceedings against someone or to file a lawsuit in a court of law. Just as one person can sue in his or her own name against another in that person's name, a company, as an independent legal entity, can sue and be sued in its own name.
A company can enter into a valid and binding contract with any of its members under the company form of organization. It is also possible for a person to be in charge of a company while also working for it. An individual can thus hold multiple positions within the organization at once, including shareholder, director, employee, and any other position.
Registration Criteria for Private Limited Companies
✔ For a private limited company, there must be at least two shareholders and two directors.
✔ A private limited company must have two directors, at least one of whom must be an Indian citizen.
✔ In India, there is no minimum capital requirement for forming a private limited company.
✔ Your company’s name is crucial because it creates the first impression in the minds of your buyers, suppliers, and stakeholders. So the factors to consider when choosing a name are that it should be short yet simple, meaningful, not illegal or offensive, unique, and end with the suffix “Private Ltd.”
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Types of GST
| Factors To Be Considered | Private Limited Company | One Person Company | Sole Proprietorship | Limited Liability Partnership | Partnership Firm |
|---|---|---|---|---|---|
| Applicable Law | Companies Act, 2013 | Companies Act, 2013 | Companies Act, 2013 | Limited Liability Partnership Act, 2008 | Companies Act, 2013 |
| Ideal For | Ideal for startups and growing companies. | Ideal for single promoters. | Ideal for small traders and manufacturers. | Ideal for professionals. | Ideal for small businesses & home businesses. |
| Minimum Number of Members | Minimum 2 shareholders and 2 directors. | Only 1 person required. | Only 1 owner allowed. | Minimum 2 partners required. | Minimum 2 partners required. |
| Initial Investment | No minimum requirement. | No minimum requirement. | No minimum requirement. | No minimum requirement. | No minimum requirement. |
| Tax Advantages | Taxed at corporate rates with various benefits. | Taxed similar to private limited company. | Taxed as an individual. | Profits taxed with LLP tax benefits. | Taxed as partnership firm. |
| Annual Filings | Annual Return, Financial Statements & ROC filings. | Annual Return, Financial Statements & ROC filings. | Income Tax Return only. | Income Tax Return & Annual Compliance. | Income Tax Return filing required. |
| Compliances | High | High | Minimal | Low | Minimal |
| Member(s) Liability | Limited to share capital. | Limited liability protection. | Unlimited liability. | Limited to LLP contribution. | Unlimited liability. |
| Transferability | Ownership transferable through shares. | Transfer possible as per rules. | Cannot be transferred. | Transfer possible. | Cannot be transferred. |
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