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Shalini Singh

Shalini Singh | Updated: Aug 14, 2019 | Category: Legal

Registration of a Private Limited Company in India – Step by Step Procedure

A company needs to register itself as a private Limited Company because it has several advantages. Private Limited Company registration in India is governed by the Ministry of Corporate Affairs, Companies Act, 2013. A private Limited Company can have a minimum of 2 members and a maximum of 50 members. Pvt. Ltd. It offers limited liability to its shareholders. It is privately held for small businesses and start-up companies having strength of 10 to 15 members.

Advantages of incorporating a private limited company in India

Private Limited Company Registration in India has many benefits to the employer as well as the shareholders. Here is a few of them –

Flexible and Limited Liability to Shareholders

The shareholders of a private company have limited liability that is the ratio of the company’s liability that the shareholder ha to pay and the amount contributed by the shareholder is the same. Thus if there is a loss, the shareholders will suffer in proportion to the share capital paid.

Ease of raising fund

The private limited companies are being funded by the Angel, Seed Funds, and Venture Capitalists. There is a possibility to grow big and expand.

Exist Forever/ Perpetual Succession

Once the company is registered as a Private Limited Company, it will have a lifetime existence once it is liquidated.

Rewarding to the employees

A private Limited Company can issue ESOPs (Employee Stock Option or Sweat equity shares to the deserving employees in order to reward them.

The safe feeling among the shareholders

Companies registered as a private limited company are trustworthy for the shareholders. Anyone can check the details of the company through MCA (Ministry of Corporate Affairs).

Disadvantages of Incorporating Private Limited Company

  • Higher Cost is involved in getting the registration as the Private Limited Company.
  • Higher Taxation
  • Income tax of 25 percent is to be paid if turnover is more than 50 crore and 30 percent for all other cases.
  • It requires a compulsory audit every financial year.
  • There is higher annual compliance like meetings, statutory registers, TDS, Income tax returns.

Checklist for the Company Registration in India

Following conditions need to be met for registering a company as a private Limited Company

Two Directors

There must be at least two directors in the company, and at most 15 can be there. In these, at least one director should be the resident of India.

Unique Name

The name of the private Limited Company must be unique and should not match with any of the existing companies’ names and trademarks in India.

Minimum Capital Amount

There is no minimum capital for a company. The private limited company should have an authorized capital of at least Rs 1 Lac.

Registered Office

The registered office of the private limited company can even be a rented home if an NOC is granted by its landlord.

Checklist of Documents required for the Private Company Registration

  • Scanned Copy of PAN card or Passport of Directors
  • Scanned copy of the photograph of the Director.
  • Scanned copy of the Aadhaar Card / Voter Identity Card of Director
  • Copy of rent agreement, Aadhaar card, and Voter Identity proof
  • NOC from the landlord.
Company Registration

A detailed procedure for the company registration

A registered company always proves to be a niche with respect to other companies that are not registered. It boosts the progress of the little and start-up companies as well.

  • Application of DSC and DPIN

DSC is the online signature used for filing and DPIN is the Director’s PIN number issued by the MCA. This step can be skipped if they already have the DSC and DPIN.

  • Approval of Name by MCA

Three different options are provided to the MCA out of which only one will be selected. The name provided should be unique and must reflect the service of the company. Submission of MOA and AOA (Memorandum Of Association And Article of Associate

After the name is approved, both MOA and AOA are filed with MCA.

  • Incorporate Certificate

It usually takes 15-25 days to form a private company after which an incorporation certificate is issued. It is proof that the company has been created and it also includes the CIN Number.

  • Apply for PAN, TAN and Bank Account

After all the procedures are done, one needs to apply for PAN and TAN. PAN and TAN are received in 7 working days. After this, one can submit the Incorporation certificate, MOA, AIOA, and PAN with a bank in order to open the account.

Important Facts to be considered while selecting the name of the company

The name of the company reflects the company’s service to its buyers, suppliers, and stakeholders, so it must be relevant and suggestive.

It must be short, simple and meaningful

It must be small, concise, and easy to remember and create a good impression in the mind of people. The name of the company must be related to the business it is involved in.

Unique Name

The name of the company should be unique and not be identical to an existing company or trademark. One can check the availability of the name of the company in India against the MCA and trademark database. If the preferred name of yours has already been registered, then the name has to be trademarked, and in case it is trademarked then a NOC has to be taken from its owner in order to be approved.


The name of the private limited company must end with the suffix “Private Ltd” if it is a Private Limited Company and “LLP” if it is a Limited liability partnership.

Should not be illegal and derogatory

The name of the company should not be against the law and should not hurt the sentiments, customs, and beliefs of any religion.


Private company registration in India is an easy process and usually takes 15-25 days to complete. It mainly depends upon how fast the relevant documents are provided by the applicant and how smooth the government is working for the procedure. A private company is the most common vehicle to carry on the business and one of the way to enjoy the benefit of incorporate entity.

For anything related to company registration, reach us at LawyerINC.

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Shalini Singh

Shalini Singh

Shalini is working as a legal research and content writer from the past 2 years with experience in covering Legal Act and Amendment related topics.

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