Private Limited Company is the most prevalent and popular type of corporate legal entity in India. Private limited company registration is governed by the Ministry of Corporate Affairs, Companies Act, 2013 and the Companies Incorporation Rules, 2014. To register a private limited company, a minimum of two shareholders and two directors are required. A natural person can be both a director and shareholder, while a corporate legal entity can only be a shareholder. Further, foreign nationals, foreign corporate entities or NRIs are allowed to be Directors and/or Shareholders of a Company with Foreign Direct Investment, making it the preferred choice of entity for foreign promoters.
Unique features of a private limited company like limited liability protection to shareholders, ability to raise equity funds, separate legal entity status and perpetual existence make it the most recommended type of business entity for millions of small and medium sized businesses that are family owned or professionally managed.
Tax Partner & Co. is the market leader for services relating to company registration in India. Tax Partner & Co. can help you register a private limited company, one person company, nidhi company, section 8 company , producer company or Indian subsidiary. The average time taken to complete company formation is about 10 – 15 working days, subject to government processing time and client document submission. Get a free consultation for private limited company registration and business startup by scheduling an appointment with Tax Partner & Co. adviser.
Identity and Address Proof
Identity and address proof (Voter ID, Aadhaar) will be required for all directors and shareholders of the company to be incorporated. In case of Indian nationals, PAN is mandatory. For foreign nationals, apostatized or notarized copy of passport must be submitted mandatory. All documents submitted must be valid. Residence proof documents like bank statement or electricity bill must be less than 2 months old.
Registered Office Proof
All companies must have a registered office in India. To prove access to the registered office, a recent copy of the electricity bill or property tax receipt or water bill must be submitted. Along with the utility bill, rental agreement or sale deed and a letter from the landlord with his/her consent to use the office as a registered office of a company must be submitted.
A limited company grants limited liability to its owners and management. Being a public company allows a firm to sell shares to investors this is beneficial in raising capital. A minimum of three Directors are required for establishing a Public Limited Company and it has more stringent regulatory requirements compared to a Private Limited Company.
Public Limited Companies are those types of companies where minimum number of members is seven and there is no cap on the maximum number of members. A public limited company has most of the characteristics of a private limited company. A public limited company has all the advantages of private limited company and the ability to have any number of members, ease in transfer of shareholding and more transparency. Identifying marks of a public limited company are name, number of members, shares, formation, management, directors and meetings, etc.
Obtaining DSC & DIN
Digital Signature Certificate(DSC) and Director Identification Number(DIN) is required for the proposed Directors of the Public Limited Company. DIN and DSC can be obtained for the proposed Directors within 5 to 7 days.
A minimum of one and a maximum of six proposed names must be submitted to the MCA. Subject to availability, naming guidelines and MCA processing time, Name Approval can be obtained in 5 to 7 working days.
Incorporation documents can be submitted to the MCA along with an application for incorporation. MCA will usually approve the application for incorporation in 5 to 7 days, subject to their processing time.
Nidhi company is a Non-Banking Finance Corporation (NBFC) which is more popular in the southern part of the nation. It is recognized under section 406 of the Companies Act, 2013 and is governed by the Companies Act, 2013 and Companies (Nidhi Companies) Rules, 2014. Like all other finance corporations, it also falls under the purview of RBI. Even though it is an NBFC but it has been exempted by the rules applicable to them. It only deals with the money of the existing members/ shareholders of the company. It deals in lending and borrowing of money within the members.
The company should fulfil all the minimum requirements to register a Nidhi Company like:
- Minimum 7 members
- Document requirement
- Minimum capital requirement
- Digital signature is encrypted signature made for every director
- Minimum of 3 directors
- Minimum paid capital should be Rs.5,00,000.
- Minimum net owned fund should be at least Rs.10,00,000