Company is a popular option to start a business in India by startups and businesses with higher growth aspirations. Pvt Ltd company is incorporated under the Companies Act of 2013, and governed by the Ministry of Corporate Affairs (MCA). It is a registered corporate structure, that provides business a separate legal identity from its owners. Hence, providing key advantages like the ability to contract in its own name, and safeguard personal assets of the owners from business liabilities.
Start-ups and growing companies prefer private limited company as it allows outside funding to be raised easily, limits the liabilities of its shareholders and enables them to offer employee stock options to pull in top talent
To start a company, a minimum number of 2 members are required and a maximum number of 200 members as per the provisions of the Companies Act, 2013.
The liability of each member or shareholders is limited. It means that if a company faces loss under any circumstances then its shareholders are liable to sell their own assets for payment. The personal, individual assets of the shareholders are not at risk.
The company keeps on existing in the eyes of law even in the case of death, insolvency, the bankruptcy of any of its members. This leads to the perpetual succession of the company.The life of the company keeps on existing forever.
Private company has a privilege over the public company as they don’t have to keep an index of its members whereas the public company is required to maintain an index of its members.
When it comes to directors a private company needs to have only two directors. With the existence of 2 directors, a private company can come into operations.
It must have a minimum paid-up capital of Rs 1 lakh or such higher amount which may be prescribed from time to time.
Prospectus is a detailed statement of the company affairs that is issued by a company for its public. However, in the case of a private limited company, there is no such need to issue a prospectus because this public is not invited to subscribe for the shares of the company.
The amount received by the company which is 90% of the shares issued within a certain period of time. If the company is not able to receive 90% of the amount then they cannot commence further business. In the case of a private limited company, shares can be allotted to the public without receiving the minimum subscription.
It is mandatory for all the private companies to use the word private limited after its name.
Once a name for the company is decided, the following steps have to be taken by the applicant
Apply for DSC (Digital Signature Certificate) and DIN (Director Identification Number)
Apply for the name availability
File the MOA and AOA to register the private limited company
Apply for the PAN and TAN of the company
Certificate of incorporation will be issued by RoC with PAN and TAN
Open a current bank account on the company name
"PAN Card of shareholders and Directors.Foreign nationals must provide a valid passport
Aadhar card and Voter ID/ Passport/ Driving License of Shareholders and Directors.
Latest Telephone Bill /Electricity Bill/ Bank Account Statement of Shareholders and Directors.
Latest Passport size photograph of Shareholders and Directors.
Latest Electricity Bill/ Telephone Bill of the registered office address
No Objection Certificate to be obtained from the owner(s) of registered office
Rent Agreement of the registered office should be provided if any
Company incorporation certificate is provided as a pdf document by the Ministry of Corporate Affairs (MCA). MCA does not provide hard or printed copy of incorporation certificate.
This type of organization in characterized by the fact that ownership and management is separate. The capital of the Company is provided by a group of people called shareholder who entrust the management of the Company in the hands of persons known as Board of Directors. These are closely held businesses usually by family, friends and relatives. Private companies may issue stock and can have maximum of 200 shareholders. However, their shares do not trade on public exchanges and are not issued through an initial public offering.
Authorised capital is the maximum value of equity shares that can be issued by a company. On the other hand, paid up capital is the amount of shares issued by the company to shareholders. Authorised capital can be increased after incorporation at anytime to issue additional shares to the shareholders.
Any person over the age of 18 years can become a director in a company. Also, there are no conditions on residency or citizenship. Hence, NRIs and Foreign Nationals can easily start and manage a private limited company in India.
Yes, every company registered in India must have a registered office where all official communication is sent by the MCA, governmental agencies, financial institutions, etc. The registered office of a company can be in any state of India.
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