Private Limited Company

A Private Limited Company is one of the most common company structures in India, and it is governed by the Companies Act of 2013. It is essential for entrepreneurs who want to start a business in India to register a Private Limited Company. This gives directors the benefit of restricted liability in addition to encouraging the creation of a solid corporate framework. A company must register with the ROC (Registrar of Companies) in accordance with the standards & rules established by the MCA in order to be registered under the Companies Act, 2013.

Minimum Requirement

    Minimum 2 Shareholders

   One of the Directors must be Indian Resident

   DSC (Digital Signature Certificate) for 2 Promoters & 1 witness

   Minimum 2 Directors

   Suggested Authorised Share Capital 20,000 (INR Twenty Thousand)

   The directors and shareholders can be same person

   DIN (Director Identification Number) for all Directors

Private limited company types include:
Company Limited by Shares: The Memorandum of Association specifies a nominal share level, above which shareholders’ liability is restricted.

Company Limited by Guarantee: The amount of guarantee stated in the Memorandum of Association serves as the limit on member responsibility. This guarantee is solely used in the winding down process.

Members of limitless firms are personally liable indefinitely for the debts and liabilities of the company. They are still regarded as a distinct legal entity, meanwhile, and no member may be sued individually.

Advantages of a Private Limited Company

One of the most common business forms in India is the private limited company. Let me describe the various benefits and drawbacks of this.
Limited Liability: This protects personal assets from the debts and liabilities of the firm by limiting shareholders’ liability to the amount of their capital contribution.
Differentiated Legal Identity: A Private Limited Company is a separate legal entity from its owners. It is able to enter into contracts, hold property, and bring or defend legal proceedings on its own behalf.
Constant Existence: The business continues to operate even in the event that directors or shareholders change. Its continued existence is not dependent on how long its partners live.

Funding Ease: It is simpler to raise money by issuing shares to angel, venture, or capitalists. This arrangement draws in outside capital.

Tax Benefits: Private Limited Companies are tax-efficient businesses since they may be eligible for a number of tax breaks and exemptions.

Credibility and Trust: Customers, suppliers, and partners tend to be more confident and trusting of a company that has “Pvt. Ltd.” in its name.

Disadvantages of a Private Limited Company

Compliance Burden: Deal with legal requirements like as filings, audits, and financial reporting.
Complex Setup: Compared to more surface-level systems, the process and management costs are higher.
Share Limitations: 200 shareholders maximum in India; restricted share transfers.
Public Disclosure: The public’s access to financial information affects privacy.
Exit Complexity: Compared to other structures, selling or departing is more difficult.
Slower Decisions: Involving directors and shareholders may cause decisions to move more slowly.

Documents Required for Private Limited Company Registration Online

PAN and Aadhaar Card

Both PAN and Aadhaar Card of all Indian Shareholders and Directors

Identity Proof

Either Voter ID, Passport, or Driving License of the Shareholders and Directors.

Proof of Address

Copy of the latest Telephone Bill, Electricity Bill, or Bank Account Statement of the Shareholders and Directors

Photographs

Latest passport size photographs of all the Shareholders and Directors

Business Address Proof

Either of the latest Utility Bill (Electricity, Telephone, Gas, Water)  or Property Tax Bill of the registered office address. Rent agreement and NOC from the owner in case of rented property