Private limited company registration
Registering a Private Limited Company is a strategic decision and offers limited liability, legal identity, and greater credibility making it ideal for startups and SMEs. It also safeguards shareholders’ personal assets unlike sole proprietorships.
Key benefits of Private Limited Company registration
Registering a Private Limited Company offers key benefits like:
Limited liability protection
Shareholders’ liability is limited to the amount they invest in the company, thus safeguarding personal assets from any financial or legal obligations of the company.
Separate Legal Entity
A Private Limited Company possesses distinct legal identity, separate from its owners. This allows the company to own property, enter contracts, and sue or be sued independently.
Easy access to funding
The ability to issue shares makes it easier to attract investors and secure funding for growth and expansion.
Improved Credibility
Being a registered entity increases trust among customers, vendors, lenders, and potential partners, positively impacting business opportunities.
Perpetual existence
The company continues to exist irrespective of changes in ownership or directorship, ensuring uninterrupted operations.
Tax benefits
Private Limited Companies benefit from lower corporate tax rates and deductions on valid business expenses, enhancing tax efficiency.
Ownership transferability
Shares can be transferred with minimal disruption to business operations, allowing smooth exit or entry of shareholders.
Separate management
Ownership and management can be distinct, enabling professional managers to run the company while shareholders focus on investments.
Better growth opportunities
A private limited company can enter into joint ventures, contracts, and partnerships more easily, fostering business growth.
Compliance and transparency
Following regulatory requirements increases transparency and builds investor and customer confidence.
Brand protection
Once registered, your company’s name is protected legally, preventing others from using it.
Global recognition
Private limited companies are recognized internationally, facilitating business expansion across borders.
Minimum Requirements for Private Limited Company Registration
The basic requirements for registering a Private Limited Company are:
Directors: A Private Limited Company requires 2 to 15 directors as per legal norms. Directors must be at least 18 years old and should not be disqualified by law.
Shareholders: Private Limited Company must have at least two shareholders and may have up to 200 shareholders. Directors can also act as shareholders.
Registered Office: A valid physical address proof is mandatory.
Digital Signature Certificate (DSC): All proposed directors and authorized signatories must obtain a Class 3 DSC to electronically sign documents submitted to the MCA.
Director Identification Number (DIN): Each director must obtain a DIN, a unique identification number issued by the government.
Unique Company Name: Proposed name must be unique and in compliance with the requirements of Companies Act, 2013 and must not infringe on existing trademarks or resemble names of existing entities.
Points to be kept in mind while choosing name of the company
Selecting the right name is vital in registering a Private Limited Company. Here are some key points to consider:
Uniqueness
Name must be unique and not identical or similar to any existing company or trademark.
Relevance
It should reflect the nature of your business, making it easier for customers to relate to your services or products.
Avoid restricted words
Do not use words like “Government,” “Bank,” “Stock Exchange,” or others restricted by law without proper approval.
Mandatory suffix
The name must end with “Private Limited”.
Trademark clearance
Ensure that the proposed name does not infringe on any existing trademarks to avoid future legal issues.
Simple and easy to remember
Choose a name that is easy to spell, pronounce, and recall for better brand recognition.
No Offensive or Misleading Terms
Avoid names that may be considered offensive, misleading, or violate public order.
Approval from Registrar of Companies (“ROC”)
Name must be approved by ROC during the registration process, so propose at least 2–3 alternatives in case your first choice is rejected.
Documents required for private limited company registration
To register a Private Limited Company in India, the following documents and details must be submitted to the MCA:
For Directors and Shareholders
PAN Card – Mandatory for all Indian directors and shareholders.
Aadhaar Card / Voter ID / Passport / Driving License – As identity proof.
Passport (for foreign nationals) – Compulsory for foreign directors/shareholders.
Photograph – Recent passport-size color photograph of all directors and Shareholders.
Residential Address Proof – Utility bill, bank statement, or mobile bill (not older than 2 months).
Digital Signature Certificate (DSC)
Director Identification Number (DIN)- Can be applied along with incorporation via SPICe+ Form.
Registered Office Address Proof
Electricity or any other utility Bill – Not Older than 2 Months.
Rent Agreement – Duly executed agreement if the premises are rented.
NOC - From the property owner, authorizing the use of premises as the registered office.
Additional Information
Resolution/Consent from existing entity – If a body corporate is acting as a shareholder.
Proof of business address for communication – If different from the registered office.
Registration Steps for a Private Limited Company
Registering Private Limited Company in India involves a structured process governed by the MCA. Here are the key steps:
Obtain Digital Signature Certificate
Every proposed director/shareholder must obtain a Digital Signature Certificate to sign documents electronically. It is issued by government-approved certifying agencies. Documents Required: PAN, Aadhaar, email ID, phone number, and photo.
Apply for Director Identification Number (DIN)
DIN is a unique identification number mandatory for every director. It can be applied while filing the SPICe+ form. No separate process is needed if applying during incorporation.
Reserve Company Name (SPICe+ Part A)
Submit 1-2 unique, MCA-compliant names via SPICe+ Part A. Verify trademark and domain availability before filing.
Draft Documents and complete SPICe+ Part B
Once name is approved, fill SPICe+ Part B, an integrated form covering:
- Company incorporation
- PAN & TAN application
- ESIC, EPFO, Professional Tax (in some states)
- GST (optional)
- Bank account (via AGILE-PRO)
Also prepare and attach the MOA, AOA, and declaration by directors (Form INC-9)
Upload Forms and Pay Fees
Submit all required forms—SPICe+, AGILE-PRO, MOA, AOA—via the MCA portal. Pay registration fees and stamp duty which vary by state and authorized capital.
Verification by ROC and Issuance of Incorporation Certificate
The ROC reviews the submitted application. If all details are correct, you’ll receive:
- Certificate of Incorporation (COI)
- PAN and TAN
- PF and ESI Registration
Open Company Bank Account
Open a company bank account in the business name.
Post Incorporation Compliances
After registration, a private limited company must follow certain legal and regulatory compliances to avoid penalties. Here are the key compliances to be maintained:
Appointment of Auditor
Appoint a statutory auditor within 30 days of incorporation as required by law.
INC-20A: Declaration for Commencement of Business
File within 180 days of registration to declare receipt of share capital. Non-compliance may result in penalties and company strike-off.
Issuance of Share Certificates
Share certificates must be issued to all shareholders within 60 days from the date of allotment of shares.
Document Compliance
As per the Companies Act, 2013, all official documents (e.g., letterheads, invoices, emails) must display the Company Name, CIN, Registered Office Address, Email ID, and Contact Number.
Filing of Annual Returns
File Form MGT-7 (Annual Return) and Form AOC-4 (Financial Statements) with the ROC annually.
Conducting Board Meetings
Hold minimum of four board meetings per year, with no more than 120 days between two meetings.
Holding Annual General Meeting (AGM)
Conduct an AGM every financial year within six months from year-end (within nine months in the first year)
Maintaining Statutory Registers and records
Maintain registers for members, directors, charges, and other statutory records as per the Act.
Income Tax Return Filing
File annual ITR with the Income Tax Department, irrespective of turnover or profitability.
Director KYC
Directors must annually update their KYC with the MCA.
Books of Accounts
Maintain accurate books per Accounting Standards and Companies Act, 2013.
FAQs on Private Limited Company Registration in India
What is Private Limited Company in India?
A Private Limited Company under the Companies Act, 2013, provides limited liability, separate legal identity, and permits up to 200 shareholders.
What are the key benefits of a Private Limited Company?
Key benefits include:
- Limited liability for shareholders
- Separate legal existence
- Better funding opportunities
- Higher credibility
- Perpetual succession
- Tax planning advantages
- Easy share transfer
What are the minimum requirements to register Private Limited Company in India?
- Minimum 2 directors and 2 shareholders required (can be the same persons).
- Valid registered office address in India
- Digital Signature Certificate for directors/Members
- Director Identification Number
- A unique company name
How to select a name for a Private Limited Company?
- Must be unique and relevant to the business and easy to remember
- Avoid restricted words like “Government” or “Bank”
- Must end with “Private Limited”
- Check domain and trademark availability
What are the list of documents required for registering a Private Limited Company?
For Directors and Shareholders:
- PAN Card (mandatory for Indians)
- Aadhaar/Voter ID/Passport/Driving License
- Passport (mandatory for foreign nationals)
- Recent photograph
- Residential address proof
For Registered Office:-
- Electricity bill or utility bill (not older than 2 months)
- Rent agreement (if applicable)
- NOC from the property owner
What is the process for Private Limited Company registration in India?
- Get DSC for directors
- Apply for DIN
- Reserve your company name via SPICe+ Part A
- Submit incorporation documents via SPICe+ Part B
- File AGILE-PRO for PAN, TAN, GST, etc.
- Pay government fees and upload forms on the MCA portal
- ROC verifies and issues Certificate of Incorporation
How long does it take to register Private Limited Company?
Usually takes 7–15 working days, depending on documents and MCA approval.
Can a foreign national be a director in a Private Limited Company?
Yes, but at least one director must be a resident in India (minimum 180 days during the financial year).
What is the cost of registering a Private Limited Company in India?
Costs range from ₹10,000 to ₹20,000, based on state, capital, and professional fees.
What compliances must a Private Limited Company follow after registration?
- Appointing a statutory auditor
- Filing INC-20A (commencement of business)
- Conducting board meetings
- Holding AGM (Annual General Meeting)
- Filing annual returns (MGT-7, AOC-4)
- Filing income tax returns
- Maintaining statutory registers and books of accounts
- Director KYC (DIR-3)
Is GST registration mandatory for a Private Limited Company?
Not mandatory unless turnover exceeds ₹20–40 lakh (based on state and business type). Voluntary registration allowed for input tax benefits.
Can I convert my sole proprietorship into a Private Limited Company?
Yes, by registering a new Private Limited Company and transferring assets/liabilities.
What is a Director Identification Number (DIN)?
DIN is a unique ID for individuals to act as company directors. It is required during company registration and must be kept updated.
What is a Digital Signature Certificate (DSC)?
DSC is an electronic signature used to sign documents filed on the MCA portal. It’s mandatory for directors during the registration process.
Do I need a company bank account after registration?
Yes, after registration, opening a company bank account is mandatory.
Can NRIs incorporate a Private Limited Company in India?
Yes, NRIs can register a company in India with one resident director and compliance with FEMA FDI rules.
Is physical presence required for incorporation?
No, registration is fully online via MCA portal using DSCs and self-attested documents.