Private Limited Company is one of the most stable and much used business structure in India owing to its stability and availability of limited liability protection. Registration is to be done with Ministry of Corporate Affairs (MCA).
For private limited company registration in Bangalore, there should be a minimum two shareholders and 2 directors and the maximum number of shareholders can be 200. New company registration process is online and each of the Directors should have a Director Identification Number (DIN) and subscribers have to procure a Digital signature for registration. Process of incorporation is online and it takes 10-15working days from the date you give your complete documents to us and subject to availability of the proposed name.
Requirements for Pvt Ltd Company registration
- A Private Limited Company can be incorporated with a minimum of two shareholders and two directors.
- At the initial time of incorporation, a maximum of 3 directors is allowed.
- All the directors must have a Digital Signature Certificate (DSC).
- Even foreign nationals and NRIs can be directors.
- Shareholders and directors can be the same person.
Minimum Paid-up capital and Authorized capital requirement
- Minimum paid-up capital for a Private Limited Company is Rs. 1 Lakh.
- Authorized capital is the maximum number of shares which the company can issue to its shareholders. It would be best if you prescribed the authorized capital in MOA and AOA during its incorporation.
The Key Advantages of Incorporating a Private Limited Company are listed below
Easy to Form
Incorporating a Private Limited Company is quite simple. Two people can form a private limited company in 10-15 days.
Limited Liability
Shareholders would be liable to any financial risks only to the extent of capital invested by them in the company.
Easy Access to Funds
Private Limited Companies can receive funds and issue share or debt instrument to the investor. It is the most preferred form of entity for Venture Capital investments.
Easy to expand
Private companies can be converted into public companies. This gives it the flexibility to expand and even go for Initial Public offerings in the long run.
Elevated Legal Status
Private Limited Companies’ artificial person status allows it to enter into a contract, sue and also be sued without holding the members or directors liable.
Share Valuation
Since Private Limited companies have the concept of shareholding, it can be valued to show company’s financial strength and makes it easy for allotting shares to investors and employees.
Enhanced Brand value
Private Companies benefit from better brand exposure compared to One Person Company or Limited Liability Partnership.
Easy to Exit
If for some reason a company is not doing well, the promoter has the option to exit the business. Fast Track Exit (FTE) is one of the main highlights of a Private Company that allows winding up in 3 months time.
Continuity of Business
The private limited company can be closed only by a formal winding up the process; This ensures continuity of business and there is no question of
Private Limited Company Registration Process
Step 1 – Obtain Digital Signature Registration (DSC)
As the registration process is online, the forms require a digital signature. DSC is mandatory for all subscribers and witnesses in MOA and AOA. There are two different categories of DSC. In the Class 2 category of DSC, your identity is verified against a pre-verified database. In the Class 3 category of DSC, you need to present yourself before registering authority to prove your identity.
Step 2 – Submission of the company’s name with an objective
After following the name availability guidelines, be sure that the proposed name is unique. This step involves the submission of your company name along with the objectives.
Step 3 – Drafting MOA and AOA
MOA is Memorandum of Association and AOA is Articles of Association. Both are legal documents that are prepared in the formation and registration process of a Private Limited Company. MOA contains the objectives of the company while AOA contains the rules and regulations of a company, defining the company’s purpose. AOA also specifies the process of appointing directors and the handling of financial records.
Step 4 – Filing of MOA and AOA with MCA
The name of the company must have “Private Limited” as the last words. After drafting MOA and AOA, both the documents need to be filed with MCA for the approval.
Step 5 – Obtaining Certificate of Incorporation from MCA
After all the documents for Private Limited Company registration are processed and approved by MCA, you will receive a registration certificate from MCA