A Private Limited Company (Pvt. Ltd.) is a type of business structure in which the company’s ownership is privately held. It is governed by the provisions of the Companies Act, 2013 in India. Here are its key characteristics:
- Limited Liability: The liability of shareholders is limited to the amount unpaid on their shares.
- Separate Legal Entity: The company is a separate legal entity from its owners.
- Restriction on Shares Transfer: Shares can only be transferred with the consent of other shareholders.
- Minimum and Maximum Members:
- Minimum: 2 shareholders.
- Maximum: 200 shareholders.
- Perpetual Succession: The company continues to exist even if shareholders or directors change.
- No Public Fundraising: A private limited company cannot issue shares to the public or list them on stock exchanges.
How is a Private Limited Company Different from Other Companies?
- Feature Private Limited Company Public Limited Company Partnership Firm Sole Proprietorship
- Ownership Limited to 2-200 members Minimum 7 members, no maximum limit Minimum 2 partners Single owner
- Liability Limited to shares held Limited to shares held Unlimited or limited (as per deed) Unlimited
- Shares Transferability Restricted Freely transferable Not applicable Not applicable
- Fundraising Private investors only Open to public and investors Limited to partners None
- Legal Entity Separate legal entity Separate legal entity No separate legal entity No separate legal entity
- Compliance High Very high Moderate Low
Documents Required for Registering a Private Limited Company
Here’s a list of documents required to register a Private Limited Company in India:
- Documents of Directors and Shareholders
- Identity Proof:
- PAN Card (Mandatory for Indian nationals).
- Passport (For foreign nationals).
- Address Proof (any one of the following):
- Aadhaar Card.
- Voter ID.
- Driving License.
- Passport.
- Residential Proof (any one of the following, not older than 2 months):
- Utility Bill (Electricity, Gas, Water, etc.).
- Bank Statement/Passbook.
- Telephone/Mobile Bill.
- Documents of the Registered Office
- Proof of Address (any one of the following, not older than 2 months):
- Electricity Bill.
- Property Tax Receipt.
- Rent Agreement and a No Objection Certificate (NOC) from the landlord if the premises are rented.
- Title Deed (if the property is owned).
- Company-Related Documents
- Memorandum of Association (MoA): Defines the company’s objectives and scope of operations.
- Articles of Association (AoA): Outlines the internal rules and regulations of the company.
- Declaration by Directors: Form DIR-2 to declare their consent to act as directors.
- Digital Signature Certificate (DSC): Required for filing forms electronically.
- Director Identification Number (DIN): Mandatory for all directors.
- Subscriber Sheet: Signed by shareholders with details of the shares subscribed.
- Additional Forms
- INC-9: Declaration by the first subscribers and directors.
- AGILE-PRO: Application for GST registration, EPFO, ESIC, and opening a bank account (optional).
- Steps for Registration
- Reserve Name: File the application for name approval via RUN (Reserve Unique Name) or SPICe+ form.
- File Incorporation Documents: Submit MoA, AoA, and other required documents using the SPICe+ form.
- Obtain Certificate of Incorporation (CoI): Once approved, the Registrar of Companies (RoC) issues the CoI.
- PAN and TAN: Issued along with the CoI.
- Open a Bank Account: Use the CoI, PAN, and other documents to open the company’s bank account.
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