Private Limited Company

Overview of Private Limited Company

A private limited company (PLC) is one of the most common type of legal entity India. Private Limited Companies are governed by the Companies Act, 2013 and a minimum of 2 directors and 2 shareholders are required with one of the directors to be an Indian resident and Indian citizen.

To register a company in India, the following minimum requirements are:

1. 2 Director – 1 person should be an Indian national and Indian resident
2. 2 shareholders – Directors can be shareholder
3. Office registered in India

100% direct ownership (FDI) is allowed in most areas of India and there is no restriction on the foreign stake of a private limited company. Therefore, most foreign subsidiary companies are established as private limited companies in India.

Eligibility criteria for Private Limited Company in India

1. A company can be launched in India with very low capital. There is no fixed amount and the shareholders of the company are being included, it can determine the capital they want to contribute. When establishing the company’s capital structure, some of the following concepts are to be taken into consideration:
2. Ankit price of the stock: The marked price of a share is per share price with which the company is include. Generally, the shares have an inscribed value of Rs. 1 or Rs. 10 or Rs. 100 or Rs. 1000 or Rs. 10,000.
3. Authorized Capital: Authorized capital is the total value of shares that the company can release to shareholders. Generally, all companies are incorporate with an authorized capital of Rs. 1 lakh or Rs. 10 lakhs. If a highly authorized capital is require, the company will have to pay additional fees to the Ministry of Corporate Affairs. The authorized capital of a company can be extende at any time after incorporation.
4. Paid-up Capital: A company’s paid-up is the number of shares issue to capital shareholders, for which they have paid or deposited money to the company. The company’s paid-up may not exceed the capital company’s authorized share capital.

Documents required to obtain an Private Limited Company

Following are the mandatory documents to be submitte by the company’s Directors and shareholders (Indian nationals) Scanned copies of:

1. PAN
2. Govt ID proof – Voters’ ID or passport or driver’s license
3. Passport size photograph
4. Specimen signature – Director’s signature on a blank document
5. ID proofs like Voter ID/passport or driver’s license
6. Latest bank statement
7. Latest utility bills like telephone, mobile or electricity
8. Passport
9. Latest bank statement
10. Specimen signature (blank document with the signature [directors only])

• Proofs for office address Scanned copies of:

1. Latest water bill or electricity bill
2. Notarized rental agreement in English
3. Receipt of the latest rent
4. In case of owned property – Sale deed or property deed
5. NoC from the property owner

Note: All the documents should be notarize (if the NRI is currently in India or in a Commonwealth country). All the documents should be notarize and apostille or attested by an Indian embassy (if in a Non-Commonwealth Country).

Important things to remember

• Name on the PAN: As PAN is an important and mandatory proof for the entire company registration process and further legal procedures like filing taxes and compliances, the applicant has to ensure the name on the PAN is correct. Any changes required in change of spelling or any such anomalies dure to spelling errors have to be rectified before submission of the documents. All the other proofs must have the same name as on the PAN. In case if they are different, changes must be done on the others as well.
• Latest utility bills: All utility bills should be recent, not more than three months. If they are older, the ROC might arbitrarily reject the application.

NOC: NOC or no objection certificate has to be compulsorily provided by the owner of the property where the company is being registere. If it is not possible to get an NOC, then the company can be registere by any acquaintance as it is just a correspondence address.

FAQs About Private Limited Company?

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