Private Limited Company

Private Limited Company is the most popular corporate entity that is registered extensively in India. This is a popular option to start a business in India for startups and businesses with higher growth aspirations.

Private Limited company is incorporated under the Companies Act of 2013, and governed by the Ministry of Corporate Affairs (MCA). It is a registered corporate structure, that provides business a separate legal identity from its owners. Hence, providing key advantages like the ability to contract in its own name, and safeguard personal assets of the owners from business liabilities.

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Advantages of Private Limited Company Registration

Easy Transferability

As the ownership of a company is represented by shares, the ownership of a company can be transferred to any other legal entity or person in India or abroad easily - in part or whole. The directors can also be replaced to ensure business continuity.

Limited Liability

A private limited company provides limited liability protection to its shareholders. In case of any unforeseen liabilities, it would be limited to the company and not impact the shareholders.

Funding

A company can raise equity capital from persons or entities interested in becoming a shareholder. Entrepreneurs can raise money from angel investors, venture capital firms, private equity firms and hedge funds.

Separate Legal Entity

A private limited company is recognized as a separate entity legally with perpetual existence. It can have a PAN number, bank accounts, licenses, approvals, contracts, assets and liabilities in its unique name.

Pricing

All Inclusive Pricing - No Hidden Fee

Starter

₹6999
5,999*
  • All expenses and Government fee
  • 2 Digital Signatures (DSC)
  • 2 Director Identification Numbers (DIN)
  • 1 Name Approval Application
  • Certificate of Incorporation
  • PAN Number
  • TAN Number
  • Company Identification Number
  • MOA and AOA Drafting
  • DSC and DIN for additional partners at extra cost

Business

₹9999
8,999*
  • Everything in Starter Package, +
  • 1 Additional Name Approval application
  • GST Registration Application
  • MSME Registration
  • Form for Commencement of Business
  • First Auditor Appointment Resolution
  • Draft of Bank Account Opening Resolution
  • Draft of Employment offer letter
  • Draft of Employment Contract
  • Draft of Website Disclaimer Policy
  • Draft of NDA
  • DSC and DIN for additional partners at extra cost
Bestseller

Premium

₹25999
24,999*
  • Everything in Business Package, +
  • Annual form filing with MCA for 1st year
  • Form for appointment of auditor
  • GST return (up to 100 invoices per month) for 12 months
  • ITR filing for 1st year
  • DSC and DIN for additional partners at extra cost

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Documents required to register a Private Limited Company

PAN Card

PAN Card of Directors & Shareholders. Valid Passport must be provided by Foreign nationals.

Identity Proof

Aadhar card/Passport/Driving License/Voter ID of Directors & Shareholders.

Address Proof

Latest Telephone Bill /Electricity Bill/ Bank Account Statement of Shareholders and Directors.

Photograph

Latest Passport size photograph of Shareholders and Directors.

Business Address Proof

Latest Electricity Bill/Telephone Bill of the registered office address.

Rent Agreement

Rent Agreement of the registered office should be provided, if any

NOC from Owner

No Objection Certificate to be obtained from the owner(s) of registered office

Attestation by Gazetted Officer

Documents of director(s) must be attested by a gazetted officer.

4 Easy Steps to Register a Private Limited Company

Step 1: Obtaining Digital Signature​
Digital signature certificates(DSC) must be obtained for the promoters for processing the incorporation. Application for DSC requires the following documents from the applicants - passport size photos , identity proof, address proof.
Step 2: Obtaining Name Approval
In parallel to the Digital Signature application, the application for name reservation can be submitted to the MCA. Name approval applications are processed by the MCA in 24-72 hours. The name suggested must conform to the naming standards, and the name of the Private Limited Company must end or include the words - Private Limited.
Step 3: Incorporation
After obtaining name approval, incorporation application can be filed to the MCA with signed Memorandum of Association (MOA) and Articles of Association (AOA). In addition to the MOA, AOA, identity proof, address proof, other incorporation documents like affidavits and declaration of the promoters must be submitted. On filing for incorporation, approval is granted by the Registrar of Companies (ROC). In case there are any issues with the documents submitted, the application for incorporation can be resubmitted.
Step 4: Commencement of Business
Once the incorporation certificate is obtained, the Company can initiate the process for bank account opening. Once the bank account is opened, the promoters must deposit the amount mentioned in the MOA of the Company. After the equity capital is infused into the Bank's current account; the Company can file for the commencement of business with the MCA. Commencement of Business Certificate must be obtained with 180 days of incorporation to avoid a penalty.
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How to Create a Company Name

Unique Name

A Unique Name builds the company brand. This should preferably be a coined word.

Business Objective​

The second part of the name should suggest the business activity of the company

Constitution Type​

Name of the company must end with “Private Limited” as a suffix

Frequently Asked Questions about Private Limited Company

Registering a company is easy through Lawbuddy. A minimum of two people are required to act as directors and shareholders. The director’s PAN card, address proof and bank statement are required along with address proof of the registered office. The entire process takes 10 to 15 days subject to client sharing the requisite documents and Government processing time.

Authorized capital is the maximum value of equity shares that can be issued by a company. On the other hand, paid up capital is the amount of shares issued by the company to shareholders. Authorized capital can be increased any time after incorporation to issue additional shares to the shareholders.

Limited liability is the status of being legally responsible only to a limited amount for debts of a company. Unlike proprietorships and partnerships, the liability of the shareholders with respect to the company’s liabilities is limited.

On an average, the registrations get done within 10 to 15 days. The processing time would vary depending on the time taken by our clients to submit the necessary documents and government processing time.

Yes, NRIs, foreign nationals and foreign entities can register a company and invest in India, subject to the Foreign Direct Investment norms set by the RBI. However, incorporation rules in India require for one Indian national to mandatorily be a part of the company on the Board of Directors.

Yes, every company registered in India must have a registered office where all official communication is sent by the MCA, governmental agencies, financial institutions, etc., The registered office of a company can be in any state of India.

Company incorporation certificate is provided as a pdf document by the Ministry of Corporate Affairs (MCA). MCA only provides soft copy of the incorporation certificate.

Once the company is incorporated, a current account needs to be opened in the name of the company for transactions. We will help you get the documents required to open an account like certificate of incorporation, Memorandum and Articles of Association, board resolution, copy of PAN allotment letter, etc.

GST registration is mandatory for certain businesses. Companies dealing with e-commerce operations or any other interstate activity and companies with turnover of more than ₹40 Lakhs are required to obtain the same. GST registration takes just 3-5 working days with Lawbuddy.

A company is required to maintain certain compliances once it is incorporated. An auditor needs to be appointed within 30 days and income tax filing and annual return filing needs to be done every year. Apart from these, mandatory compliances like ‘Commencement of Business’ forms, and DIN eKYC also needs to be done.

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Comparison Between Various Business Structures

Act

Companies Act, 2013

Companies Act, 2013

Limited Liability Partnership Act, 2008

Indian Partnership Act, 1932

No specified Act

Registration Requirement

Registration under Companies Act is mandatory

Registration under Companies Act is mandatory

Registration under LLP Act is mandatory

Unregistered partnerships are legal, but registered entity enjoys certain advantages

There is no registration criteria prescribed. But, registration is recommended

Number of members

Minimum 2 and not more than 200 shareholders

Only an individual,and an Indian resident can be the shareholder

No bar on maximum number of partners, but minimum 2 Designated Partners are required

It is formed with minimum 2 partners, but not exceeding 50

Proprietor is the only owner of the firm

Separate Legal Entity

Yes. It is a separate entity and can own assets in its name.

Yes. It is a separate entity and can own assets in its name.

Yes. It is a separate entity and can own assets in its name.

No. It does not have any separate identity from its partners 

No.  Proprietor and business are considered the same

Liability Protection

Limited up to the total value of shares subscribed

Limited up to the total value of shares subscribed

Limited up to the capital amount agreed to introduce

Partners are jointly and severally liable to pay the debts of the Partnership Firm

Proprietor’s liability is to pay-off all the debts and obligation of the firm

Statutory Audit

Auditor must be appointed within the 30 days of incorporation

Auditor must be appointed within the 30 days of incorporation

Applicable when turnover exceeds INR 40 Lakh or contribution exceeds INR 25 Lakh

Statutory audit not applicable. Tax audit may be applicable based on turnover

Statutory audit not applicable. Tax audit may be applicable based on turnover

Ownership Transferability

Shares can be transferred with the consent of other Shareholders

Shares are not easily  transferable 

Ownership can be changed with consent of other partners

Ownership is not transferable easily, clause of partnership deed should be referred

Firm is no different from proprietor and so ownership is not transferable

Uninterrupted Existence

Yes. Perpetual existence as the management and owners are different. Ownership is easily transferable

Yes. The nominee will take place of member.

Change in Partners or Designated Partners does not affect the existence of LLP

Change in partner leads to dissolution or formation of another partnership firm

Death or insolvency of proprietor directly affects the firm

Foreign Participation

Foreign national are allowed to invest under the Automatic Route

Member, nominee and director must be an Indian resident

Foreign nationals are allowed, subject to FDI Guidelines

Foreign nationals are not allowed to be a partner

Foreign Nationals cannot commence proprietorship business

Tax Rates

Moderate. Tax rate applicable for small companies is reduced to 22%, dividend distribution tax applicable

Moderate. Tax rate applicable for small companies is reduced to 22%, dividend distribution tax applicable

High. With tax rate of 30% on business profit, no tax on income distribution to partners

High. With tax rate of 30% on business profit, no tax on income distribution to partners

Low. Tax rates of individual applied to Proprietorship Firm

Statutory Compliances

High. Companies have to meet high compliance requirements 

High. Companies have to meet high compliance requirements 

Moderate. Lesser compliance requirements compared to companies

Low. Separate ITR of partnership is filed, else there is no filing requirement

Low. No compliances and no requirement to file a separate ITR