1. SEPARATE LEGAL EXISTENCE:
A Private Limited Company is a separate legal identity in the eyes of the law. It means assets and liabilities of the business are not same as the assets and liabilities of the directors and shareholders. Both are considered as different.
2. LIMITED LIABILITY:
If the company undergoes financial distress, the personal assets of members/shareholders cannot be used for paying the debts of the Company.
A Private Limited Company can raise equity share capital as well as preference share capital from persons or entities interested in becoming shareholder of such company. Private Limited Company can raise money easily from Banks, Financial Institutions, Angel Investors, venture capital firms, private equity firms etc.
4. MANAGEMENT AND OWNERSHIP SEPARATION
The shareholders assign responsibility to operate and run the company without losing control in the form of voting.
MINIMUM REQUIREMENTS TO REGISTER PRIVATE LIMITED COMPANY:
1. UNIQUE NAME OF COMPANY:
The proposed name of the company should be unique one and should not be similar or identical with an existing company or LLP or Registered Trademark.
2. MINIMUM TWO PERSONS:
A Private Limited Company can be registered by at least two persons, who shall act as the shareholders and Directors of the company and out of which at least One director must be resident in India.
3. CAPITAL REQUIREMENTS:
There is no requirement of minimum Paid up capital to register a Private Limited Company. Investment can be made as per requirements of business.
4. MAIN OBJECTS OF THE COMPANY:
To describe business activities of the company, main objects of the company must be specified before formation of company.
PROCEDURE FOR INCORPORATION OF PRIVATE LIMITED COMPANY:
1. Filing of Application for Reservation of Name:
An application for reservation of name of the Private Limited Company shall be made in RUN Form by paying Govt. Fee of Rs. 1000/-. Maximum Two Names may be applied in RUN Form, If the name(s) applied are unique one and are not Identical/Similar with an existing Company/LLP/ Trademark then MCA shall reserve the same for 20 days otherwise the RUN form filed shall be sent for re-submission and we can apply two new names by re-submitting the RUN form in above mentioned Govt. Fee of Rs 1000/- which has already been paid by us.
However one name can directly be applied in form SPICe-32. This option should be availed in such a case where the applicant is sure that the name being applied is unique one and not similar/identical with existing Company/LLP/Trademark.
2. Obtaining Digital Signature Certificates (DSC):
After approval of name of proposed company, the next step is to obtain DSC of all the proposed first directors and subscribers.
3. Preparation of Incorporation Documents:
On the basis of KYC documents and various information received from proposed first directors and subscribers, documents are prepared for incorporation of Private Limited Company.
4. Filing of Various E-Forms for Incorporation of Private Limited Company:
The E-forms mentioned here under are filed with MCA for incorporation of Private Limited Company.
SPICE FORM 32: The Following details and information in SPICe Form 32 Shall be filled:
Name of proposed Company;
Full Address of registered office and correspondence address;
E-mail ID, Telephone Number, Fax Number, if any of the proposed company;
Authorized and Subscribed Capital of the company;
Basic details of subscribers and First Directors such as their Name, Father`s Name, Date of Birth, Pan Card Number/ Aadhar Card Number/DL/Passport Number, Nationality, Occupation, Place of Birth, Residential Status, E-mail ID, Telephone Number, Present Address, Permanent Address, Duration of Stay at present address, Number of Shares Subscribed and designation and category of First Directors.
Information specific to PAN such as Area Code, AO Type, Range Code, AO Number. etc for allotment of Pan Card Number of Company;
Information specific to TAN such as Area Code, AO Type, Range Code, AO Number. etc for allotment of TAN of Company;
Source of Income of the Company viz. Income from Business and Profession, Capital Gain, Income from House Property etc;
Declaration from Practicing Professional certifying the form that all the requirements of the Companies Act, 2013 and rules made there under regarding incorporation have been complied with.
FREQUENTLY ASKED QUESTIONS
Q.1 Is it necessary to have DIN and DSC for filing of RUN Form?
Ans. No, DIN and DSC are not necessary for filing of RUN form for reservation of Name of company.
Q.2 How many DIN are allotted by SPICe Form?
Ans. Maximum 3 DIN are allotted by SPICe form, So maximum three Individuals not having DIN can become first directors in the proposed company.
Q.3 What to do, if there are more than 3 first directors and subscribers and all of them have no DIN?
Ans. In such a case all the Individuals can become subscribers to the MOA but only three Individuals can become first directors because Form SPICe 32 allows to allot DIN to only 3 directors. Therefore in the above mentioned situation 3 individuals can become first directors and other individual can be appointed as directors after its incorporation.
Q. 4 What are the pre-conditions for incorporation of Private Limited Company?
There should be Unique Name of the company;
There should be Permanent Registered office of the company;
There must be at least 2 directors and out of which at least one director must be resident in India
There must be at least 2 subscribers to the MOA.
Requirement of DSC of all the subscribers and First Directors.
Q.5 Can the registered office of the company be situated on residential property?
Ans. Yes, registered office of the company can be situated on residential property.
Q.6 Can Foreign Nationals, NRIs and Foreign entities incorporation Company in India?
Ans. Yes, Foreign Nationals, NRIs and Foreign entities can incorporate company in India but at least one director must be resident in India in the Board of the company.
Q.7 What is the minimum capital requirements for incorporation of Private Company?
Ans. There is no minimum and maximum capital requirements for incorporation of a Private Limited Company.
Q.8 Do Certificate of Incorporation issued needs to be renewed?
Ans. Certificate of Incorporation once issued need not to be renewed. It is valid till the company struck off or wind up.
Q.9 Is Statutory Audit of Private Limited Company is compulsory, where the company was not in operations during the previous financial year?
Ans. Yes statutory Audit of Private Limited Company is mandatory, even if it was not in operations during the previous financial year.