Private Limited Company Registration in India - Online Process, pvt ltd Fee(2020) | Onfiling
For Indians

Private Limited Company

Overview

Private Limited Company

Section 2(68) of Companies Act, 2013 defines private companies as the companies whose articles of association restrict the transferability of shares and prevent the public at large from subscribing to them. This is the essential criterion that differentiates private companies from public companies. 
The Section further states that private companies can have a maximum of 200 members (except for One Person Companies). This number does not include present and former employees who are also members.
 Moreover, more than two persons who own shares jointly are treated as a single member. Earlier this definition had prescribed a minimum paid-up share capital of Rs. 1 lakh, but an amendment in 2005 removed this requirement. But now private companies can have a minimum paid-up capital of any amount.

What are the types of Private Limited Company? 

  • Limited by shares: The liability of the members is limited to the amount unpaid to the company with respect to the shares held by them.
  • Limited by guarantee: Here the members’ liabilities are limited to the amount of money they guarantee to pay in case the company is wound-up.
  • Unlimited liability: The liability of members is unlimited in this type of private companies. Personal assets can be seized and sold when the company is being wound-up. Also, the small companies having limited paid-up share capitals and turnover amounts, as defined under Section 2(85), are treated as private companies under Indian company law.


What are the mandatory compliances of a Private Limited Company?

i)   Board Meeting

  • The first meeting shall be held within 30 days of incorporation of the company in the presence of the Board of Directors.

  • In a calendar year minimum, four board meetings shall be conducted i.e. one in every three months.

ii)   Annual General Meeting

  • It is explained under section 96 of The Companies Act, 2013 that every company is required to call at least one meeting of its shareholders each year.

  • The first annual general meeting of a company must be held within nine months from the date of closing of the first financial year.

  •  After that, no meeting is necessary for the year of incorporation. The annual general meeting must take place every year for once at least.

  • The gap between one meeting and next should not exceed 15 months.

iii)  Appointment of Auditor

  • Section 139 of the Companies Act 2013, talks about the appointment of an auditor.

  • Every company at its first annual general meeting has to appoint an individual or a firm as an auditor.

iv)  Statutory auditing the book of accounts by the auditor

  •  The auditor has the right to access the books and accounts of the company.

  • A regular statutory audit shall be conducted to assess the company’s financial stability.

  • The accountants shall be liable for fraudulent representation made in the books of accounts.

  • The audited financial report shall be submitted to the Registrar of the company.

v)  Income Tax Annual Returns

  • A private limited company must file Income Tax Return by filling e-form MGT-7 on or before 30th November 2020 and failure to fill will captivate penalty of Rs 10,000.

  • The Annual Income Tax Return is filed in a period of 60 days from conducting annual general meetings.

  • The Annual Income Tax Return is calculated for the financial year with effect from 1st April to 31st March.

vi) Financial Statement

  • The private limited company shall file the e-form AOC-4 on the portal of the Ministry of Corporate Affairs on or before 30th November 2020.

  • The form has to be filed after the 30 days of the annual general meeting to the Registrar of the company.

  • The failure or delay in filing the AOC-4 form will attract the penalty of Rs 200 per day.

 What are the features of Private Companies?
  • No minimum capital required
  • There was a minimum paid-up share capital requirement of Rs. 1 lakh previously, but that is omitted now.

  • Minimum 2 and maximum of 200 members
  • A private company can have a minimum of just two members (but just one is enough if it a One Person Company), and a maximum of up to 200 members.

  • Transferability of shares restricted
  • Private companies cannot freely transfer their shares to the public like public companies. Due to this reason stock exchanges never list private companies.

  • “Private Limited”
  • All private companies must include the words “Private Limited” or “Pvt. Ltd.” in their names.

  • Privileges and exemptions
  • Private companies are not allowed to freely transfer their shares to involve limited interest by members; the law has granted them several exemptions that public companies do not enjoy.

The IT Department provides PAN and TAN, which is mentioned on the certificate of incorporation. The next step is Bank A/c opening.

Advantages

The Companies Act has given certain benefits and exemptions to private companies that public companies do not possess. These benefits accord them greater freedom in conducting company affairs. Here are some examples of them
  • Limited Liability
  • Liability of Shareholder is limited.

  • Pull in Funding
  • It is comparative easy to attract investors.

  • TEAM Building
  • By offering stocks and proprietorship to the worker’s gifts can be held. This procedure is based on a scaling where stock offering holds abilities.

  • Validity Improvement
  • As it is registered as a corporate body the credibility is enhanced, and it builds trustworthiness in the market.

  • Continuity
  • Even after the demise and exit of any investor, the firm proceeds and its reality is protected.

  • Foreign Direct Investment
  • It takes into account coordinate foreign deposits/ investments through a simple channel.

Disadvantages

  • Registration Process
  • The Registration Process is as per rules and regulations of the MCA.

  • Compliances
  • Private limited company has to follow and fulfil compliances as per companies act, Income Tax Act, Non compliances attracts heavy penalties.

  • Cannot be listed
  • In stock trade shares can’t be cited, i.e., the posting of the organizations for the first sale of stock isn’t conceivable.

  • Division of Proprietorship or Ownership
  • A noteworthy hindrance of a private restricted organization is that it requires at least 2 executives and investors for its consolidation, which prompts the division of offers.

  • Restricted Shareholders
  • In a Private Limited Company the number of investors or individuals cannot exceed the upper limit as defined in company Law.

DIGITAL SIGNATURE OF DIRECTOR

Company Incorporation application is filed online and the process starts with the issuance of Digital Signatures of class two.

COMPANY NAME APPROVAL

The Company name should be unique and not be the same or similar to an existing company, LLP or a trademark.

COMPANY INCORPORATION

For incorporation of the company one single application (spice 32) is filed with the approval, and the Certificate is issued. The IT Department provides PAN and TAN, which is mentioned on the certificate of incorporation.

Bank Account

The next step is Bank A/c opening.

Commencement of Certificate

After the opening of Bank account and transfer of share capital, Commencement of certificate is applied to start the business

Shops & Establishment Registration

Every shop and the commercial establishment are required to obtain establishment registration with the Labour Department within 30 days of starting their business. It is mandatory for all states in India.

Trade License

No one should be adversely affected by health hazard and nuisance by the improper carrying of trade a License is necessary from the municipality within 30 days of starting the business.

Professional Tax Registration

Specific legislation have been passed by majority state governments to impose a tax on profession, employment of calling of any nature, however, and the fees for it is Rs. 2500 per annum.

Goods and Services Tax (GST)

GST Registration is mandatory for each business engaged in providing services or supply of products, where the turnover exceeds Rs. 40 Lac.

Food License / FSSAI Registration

During a business of producing, trading, storing or dealing in any manner of food items, then the state level FSSAI registration or Central License is mandatory based on the turnover.

Drug License

This location-based Drug License is granted by the State Government based on fulfilling certain norms and criteria. No entity can start or continue sale/trade of medicine without drug license.

Private Security Agency License

Private Security Agency may be a lucrative business with immense potential; however, it can be started or continued only after obtaining a license from the competent authority as designated by the state government.

Import Export Code (IEC)

IEC is a ten-digit pan based registration with the DGFT. IEC is a mandatory prerequisite to start a business of Import or Export in India. Only one IEC code can be issued against a pan.

FAQS

Minimum of two Directors and maximum number is up to fifteen Directors.
Yes, the method can be expedited if all the paperwork is signed and authenticated faster, and the proposed name of the Private Limited Company should be unique. Names that are already existing private limited company / limited liability partnership / trademark can be rejected and additional time will be required for resubmission of names.
After incorporation of company, it will be active and in-existence as long as the annual compliances are met regularly. It is necessary to comply with annual compliances, otherwise the Company will become a Dormant Company and maybe strike off from the register after a period of time.
This Company is allowed to incorporate a subsidiary, as a 100% owned Private Limited Company in India subject to Foreign Direct Investment (FDI) Guidelines. Please see the FDI Guidelines for various sectors.
No, director is not required to be present in India at the time of incorporation. But all the incorporation documents with ID and address proof of foreign national must be notarised and apostilled. If a foreign director has a valid multiple entry Indian visa or Person of Indian Origin or Overseas citizen of India Card , then attestation could also be done by Public Notary/Gazetted Officer in India if the person is present in India at the time of incorporation.
For incorporation, minimum of two shareholders are required and maximum of up to 200 shareholders are allowed in a private limited company. The shareholders include natural persons or companies, alongwith foreign companies.
It is necessary for a Pvt. Ltd. Co. to organize a Board Meeting at least once in every 3 months, and an Annual General Meeting must be conducted by the Private Limited Company, at least once every year.
100% FDI is allowed in India in many of the industries under the Automatic Route. They are called RBI Approvals - if the percentage allowed for various Sectors is met. Also, an application for approval is required for automatic approvals. Some special permission and FIPB approvals could be obtained to invest over and above the regular percentage allowed for various Sectors.
Minimum authorized capital of Indian Rupees 100, is required to form a private company in India. There is no upper limit. Although paid up capital can be less than Rs. 1 Lakhs.
An address for the registered office of the Company situated in India is required. The place can be a commercial / industrial / residential where communication from the MCA will be received.
Yes, a Foreign National or an NRI can be a Director in a Private Limited Company in India after obtaining DIN. At least one Director on the Board of Directors must be a Resident in India.
We can incorporate a Pvt. Ltd. Co. in India within the time frame of two to six weeks. Also it will depend upon submission of relevant documents by the client and speed of Government Approvals. For completing registration without any delay, please choose a unique name of your Company and ensure that you have all the required documents prior to starting the registration process.
Digital Signature makes the identity of the sender or signee electronically while filing documents through the Internet. It is mandated by the Ministry of Corporate Affairs (MCA) that the Directors sign some of the application documents using their Digital Signature. Therefore, a Digital Signature is necessary for all Directors of a proposed Company.
The Director should be above 18 years of age and must be a natural person. There are no limitations in terms of citizenship or residency. Therefore, foreign nationals can be directors in an Indian Private Limited Company.
It is a unique identification number assigned to all existing and proposed Directors of a Company. It is necessary for all present or proposed Directors to have a Director Identification Number. DIN never expires and a person can have only one Director Identification Number.

List of Documents

  • Proof of Registered Office
  • Utility Bill as proof must be Latest not later than 2 months
  • Two Colour Photographs of Promoter and Director
  • Foreign national:2 Photographs
  • PAN Card and Adhaar Card of Each Promoter and Director
  • Identity Proof (Voter ID / Driving License/ Passport) of Promoter and Director
  • NOC from the owner of the premises of Registered Office
  • Foreign National: Proof of Address- Any utility bill not older than 6 months duly attested foreign notary and apostilled
  • Address Proof (Bank Statement / Electricity, Mobile, Telephone Bill)
  • Foreign National: Proof of Identity- Copy of passport duly attested foreign notary and apostilled

Pricing Plan

BASIC ₹6899
One Time

  • DSC & DIN for 2 Promoter/ Directors
  • Name approval of the company
  • MOA & AOA for the Company
  • PAN & TAN Number for the Company
  • Certificate of Incorporation (COI)
  • Bank Account Opening Support
  • GST Registration
  • Filing of INC-20A
Get Plan

SILVER ₹5000
Quarterly

  • INCLUSIVE OF BASIC PACKAGE
  • MSME Registration
  • MCA Annual & ITR Filing
  • GST E-way bill & Accounting software
  • Annual & Director's Report
  • 1 Year Dedicated Compliance Manager Support
  • Financial Statement and Board Resolution Preparation
  • Bookkeeping & Accounting upto 350 entries
Get Plan

GOLD ₹10000
Quarterly

  • INCLUSIVE OF SILVER PACKAGE
  • 12 Months GSTR Filing(GSTR-3B & GSTR-1)
  • Book Keeping & Accounting upto 800 entries
  • TDS Returns
  • -
  • -
  • -
  • -
Get Plan

PLATINUM ₹15000
Quarterly

  • INCLUSIVE OF GOLD PACKAGE
  • Payroll outsourcing upto 50 employees
  • Book Keeping & Accounting upto 2000 entries
  • -
  • -
  • -
  • -
  • -
Get Plan

Disclaimer : 1) These packages are applicable where turnover is below Rs. 50 lakh in case of profession and Rs. 1 crore in case of business. 2) Class 2 digital signatures from eMudhra with 2 year validity along with ePass 2003 token. 3) Statutory Auditor fee is payable on actuals directly to the Independent Auditor appointed by the Board of Directors. Onfiling will only be responsible for accounting, preparation of financial statements and filing of returns on behalf of the Company. 4) Upto 3 name options can be given in 1 RUN name approval request. 5) Additional Directors can be added for an additional price of Rs.999 - if DSC & DIN is available. In case no DIN or DSC is available, cost for adding additional Director will be Rs.1999, inclusive of GST. 6) Authorised capital is the amount of shares a company can issue at anytime and can be increased further in the future. Paid-up capital is the amount invested by shareholder and can be even Rs.2. 7) Additional authorised capital can be purchased if required at time of incorporation 8) In case of incorporation in Madhya Pradesh, an additional stamp duty of Rs.7550 will be applicable. In case of incorporation in Punjab, an additional stamp duty of Rs.15025 will be applicable. In case of Kerala, an additional stamp duty of Rs.3025 will be applicable.

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