How do I set up a private limited company?

| |

The idea of starting or running a Private Limited Company looks pretty fascinating and advantageous. It is true that Private Limited Company Registration offers many advantages. Thus, if you wish to start a new business and need to know about Private Limited Company, this article is for you.

What is a Private Limited Company?

According to the Companies Act, 2013, a private limited company is a company whose article of association restricts the transferability of shares and prevents the public from subscribing to them. This is a distinct feature that differentiates private limited companies from other types of public companies. Learn more at:  Private Limited Company Incorporation 

Advantages of private limited company registration:

Legal Entity – A PLC has an individual legal entity. This means that the company is accountable for managing its debtors and creditors and assets and liabilities. You will not be held accountable for the losses of the company. Thus, the creditors cannot proceed against you to recover the money.

Limited risk to personal assets – The private limited company’s shareholders have limited liability. This indicates that as a shareholder, you would be accountable for paying for the company’s liability only to the extent of your contribution. The shareholders do not have any personal liability and thus need not pay for the company’s liability out of their assets.

Trustworthiness –Indian companies are registered with the ROC under the Companies Act 2013. Anyone can confirm the details of the company via the MCA portal. Moreover, details of all the directors are offered during the formation of the company. Thus, a PLC form of business structure is trusted more.

Raising Capital – Although Private Limited Company Registration comes with compliance necessities, it is chosen by entrepreneurs as it helps them raise funds through equity, expand, and simultaneously limits accountability. A private limited company can easily create a unique pitch deck and attract investors.

Continue Existence – A company has ‘perpetual succession, i.e., uninterrupted or continued existence until it is legally dissolved. A company, being a separate legal person, is unaffected by the death or cessation of any member but carries on to be in existence regardless of the changes in membership.

Supporting Documents for private limited company registration application procedure

  • Utility bill from the office space
  • NOC from the owner of the office premises if it is rented or leased
  • Form DIR-2 showing the director’s consent
  • PAN Card
  • Copy of the lease agreement/rental agreement/property certificate
  • Self-attested proof of identity of the first directors and subscribers.
  • Affidavit of first shareholders and directors via INC-9
  • Digital Signature Certificate

After a company receives the Certificate of Incorporation, it becomes a legal entity and can start functioning as a Private limited company.

Ways to register a private limited company:

Registering your company as a private limited company is challenging as the procedure is complicated and involves several compliances. Do not fear, as the experts at E-StartupIndia can help you in every step of private limited company registration. The stepwise process of Private Limited Company Registration is described below:

Step 1: Get Digital Signature:

Digital signatures are necessary to file the forms for company formation. The registration process is online, and the forms need a digital signature. It is mandatory for all subscribers and witnesses in the Articles of Association (AOA) and Memorandum of Association (MOA).

Step 2: Applying for DIN Number

Apply for Director Identification Number: A director’s identification number for a director. It has to be obtained by anyone who wants to be a director in a company. One DIN is adequate to be a director in any number of companies.

Step 3: Name Approval

Before a company can file for incorporation, it should have a unique name. To do so, the directors should submit an application asking to reserve a particular name for the private limited company. The directors must ensure that the appropriate form is filled out and that the processing fees have been paid. One application can have a maximum of six different names, ranked in order of their preference and why the name is a good fit for the company. Government officials will then check the accessibility of each name and then approve or reject the application accordingly. Most directors hire professionals available at Unique & Creative Business Brand Name Suggestion to check the availability in advance to avoid confusion later on. It is up to the Registrar of Companies to reject or approve the application

Step 4: Obtain the Certificate of Incorporation

Once an appropriate name is reserved, the company should apply for incorporation. Moreover, it should also file an online application for registration as a private limited company via the SPICe forms.

Take a call from Expert

Proprietorship Conversion into Private Limited Company

Also, require any other guidance with respect to Company Formation please feel free to contact our business advisors at 8881-069-069.

Download E-Startup Mobile App and never miss the latest updates relating to your business.


GST Registration For Service Providers

GST on Fruits and Vegetables


Leave a Comment