Registering a Private Limited Company (PLC) in India is a popular choice for entrepreneurs due to its distinct advantages such as limited liability, separate legal entity status, and ease of raising capital. This business structure is ideal for startups and medium-sized businesses aiming for scalability and credibility. This article provides a step-by-step guide on how to register a Private Limited Company in India, covering all necessary legal and procedural aspects.
Step 1: Obtain Digital Signature Certificate (DSC)
The first step in registering a private limited company is to obtain a Digital Signature Certificate (DSC) for the proposed directors. Since the registration process is online, a DSC is required for filing electronic forms on the Ministry of Corporate Affairs (MCA) portal. Here’s what you need to do:
Select a Certifying Authority (CA): Choose a recognized CA to issue the DSC.
Complete the Application Form: Fill in the required details and attach necessary documents such as PAN card and address proof.
Verification and Issuance: After verification, the CA will issue the DSC, typically valid for one or two years.
Step 2: Apply for Director Identification Number (DIN)
Next, you need to apply for a Director Identification Number (DIN) for all proposed directors of the company. DIN is a unique identifier for directors and is mandatory for incorporating a company.
Form DIR-3: Fill Form DIR-3 on the MCA portal.
Submit Documents: Attach proof of identity and address for each director along with their passport-sized photographs.
DIN Approval: Once the documents are verified, the DIN is allotted to the directors.
Step 3: Name Reservation
Choosing a unique name for your company is a crucial step in the registration process. The name should not be similar to any existing company name or trademark. You can reserve the company name through the RUN (Reserve Unique Name) service on the MCA portal.
Check Name Availability: Use the MCA portal to check if the proposed name is available.
Submit RUN Form: Fill the RUN form and provide two names in order of preference.
Name Approval: The Registrar of Companies (ROC) will review and approve the name if it meets all criteria.
Step 4: Prepare MOA and AOA
The Memorandum of Association (MOA) and Articles of Association (AOA) are crucial documents that define the company’s objectives and the rules governing its operations.
Draft MOA and AOA: Prepare the MOA and AOA as per the requirements of the Companies Act, 2013.
Subscribers’ Details: Ensure all subscribers (initial shareholders) sign the MOA and AOA, providing their personal details.
Stamp Duty Payment: Pay the stamp duty applicable on these documents based on the state of incorporation.
Step 5: File Incorporation Form
The incorporation form (SPICe+ – Simplified Proforma for Incorporating Company Electronically Plus) is the final step in the registration process. This integrated form provides a single-window for multiple services such as name reservation, DIN allotment, incorporation, and PAN/TAN application.
Fill SPICe+ Form: Provide all necessary details including registered office address, capital structure, and details of directors and subscribers.
Attach Documents: Attach supporting documents such as:
MOA and AOA: Signed copies.
Proof of Office Address: Utility bill, rent agreement, NOC from the owner.
Identity and Address Proof of Subscribers: PAN card, Aadhaar card, passport.
Declaration by Directors and Subscribers: Form INC-9.
Submit and Pay Fees: Submit the form along with the prescribed fee on the MCA portal.
Step 6: Certificate of Incorporation
After verifying the submitted documents, the ROC issues a Certificate of Incorporation (COI). The COI includes the company’s Corporate Identification Number (CIN) and confirms that the company is legally registered under the Companies Act, 2013.
Post-Incorporation Compliances
Once the company is registered, there are several post-incorporation compliances that need to be adhered to:
Opening a Bank Account: Open a current account in the name of the company.
Issue Share Certificates: Issue share certificates to the subscribers within two months of incorporation.
Apply for GST Registration: If applicable, obtain Goods and Services Tax (GST) registration.
Maintain Statutory Registers: Keep updated records of members, directors, and charges.
Conduct Board Meeting: Hold the first board meeting within 30 days of incorporation.
Benefits of Private Limited Company
Limited Liability Protection: Shareholders’ liability is limited to the amount they invested in the company.
Separate Legal Entity: The company is distinct from its shareholders, enabling it to own property, sue, and be sued.
Ease of Fundraising: Easier access to funding from investors, banks, and financial institutions.
Perpetual Existence: The company continues to exist irrespective of changes in ownership.
Enhanced Credibility: Higher credibility compared to other business structures like sole proprietorship or partnership.
Conclusion
Registering a Private Limited Company in India involves a series of well-defined steps that ensure compliance with legal and regulatory requirements. By following the process outlined above, entrepreneurs can establish a robust business entity that enjoys numerous benefits and safeguards. From obtaining DSC and DIN to filing the SPICe+ form and adhering to post-incorporation compliances, each step is crucial for the successful registration and smooth operation of a Private Limited Company.