How to Register a Private Limited Company Online in India?
A private limited company is a business entity owned by a group of shareholders and managed by a board of directors. It is the most popular and preferred form of business entity in India, especially for startups and medium-sized businesses. A private limited company offers many advantages, such as limited liability protection, perpetual succession, easy transferability of shares, access to funds, tax benefits, etc. However, it also has some disadvantages, such as higher costs, more compliance, restrictions on share transfer, etc. In this article, we will provide an overview of how to register a private limited company online in India, along with the applicable rules, regulations, eligibility, documents, procedure, validity, renewal, cancellation, and compliance.
Applicable Rules/ Acts/ Regulations
The main rules, acts, and regulations that apply to the registration and operation of a private limited company in India are:
- The Companies Act, 2013: This is the main act that governs the incorporation, management, regulation, and dissolution of companies in India. It also prescribes the roles, duties, rights, and liabilities of the shareholders, directors, auditors, etc. of a company.
- The Companies (Incorporation) Rules, 2014: These are the rules that specify the procedure and requirements for the incorporation of a company in India. They also provide the formats and templates for various forms and documents required for the incorporation process.
- The Income Tax Act, 1961: This is the act that levies tax on the income of individuals and entities in India. It also provides various tax deductions and exemptions for companies based on their turnover, profits, investments, etc.
- The Goods and Services Tax Act, 2017: This is the act that imposes a comprehensive indirect tax on the supply of goods and services in India. It also provides various tax rates and slabs for different categories of goods and services.
Eligibility Criteria to register a Private Limited Company Online in India
To register a private limited company online in India, the following eligibility criteria must be met:
- The minimum number of shareholders required for a private limited company is two and the maximum is 200.
- The minimum number of directors required for a private limited company is two and the maximum is 15. At least one director must be an Indian resident.
- The minimum paid-up capital required for a private limited company is Rs. 1 lakh.
- The proposed name of the company must be unique and not similar to any existing company or trademark. It must also end with the words “Private Limited”.
- The proposed objects of the company must be lawful and not against public policy or interest.
- The proposed registered office address of the company must be in India.
Types and distinctions of Licenses/Services involved
There are different types of licenses/services involved in the process to register a private limited company online in India. Some of them are:
- Company name approval: This is the first step in the process of incorporation. It involves applying for the reservation of your proposed company name on [the MCA portal] using Form SPICe+ Part A. You can suggest up to two names for your company along with their significance and relevance. The MCA will approve or reject your name application within one working day based on its availability and suitability.
- Digital signature certificate (DSC): This is an electronic signature that is used to sign various forms and documents online. All directors and subscribers (shareholders) of a private limited company must obtain their DSC from any authorized agency before applying for incorporation. The DSC can be obtained by submitting an application form along with identity proof, address proof, PAN card, etc.
- Director identification number (DIN): This is a unique identification number that is allotted to every director of a company by the MCA. All directors of a private limited company must obtain their DIN before applying for incorporation. The DIN can be obtained by submitting an application form along with identity proof, address proof, PAN card, etc. on [the MCA portal] using Form SPICe+ Part B.
- Memorandum of Association (MOA) and Articles of Association (AOA): These are the key documents that define the constitution and structure of your company. The MOA specifies the name, objects, capital, and liability of your company. The AOA specifies the rules and regulations for the management and administration of your company. These documents can be drafted by using the standard templates provided by the MCA or by customizing them as per your requirements.
- Certificate of incorporation (COI): This is the final document that certifies the incorporation of your company by the MCA. It contains the name, address, date, and registration number of your company. It also contains the names and addresses of the directors and subscribers of your company. The COI can be obtained by submitting Form SPICe+ along with MOA, AOA, DSC, DIN, etc. on [the MCA portal]. The MCA will issue the COI within one to two working days after verifying your application and documents.
- PAN and TAN allotment: PAN (permanent account number) and TAN (tax deduction and collection account number) are mandatory for all companies in India for tax purposes. PAN is a 10-digit alphanumeric number that is used to identify your company for income tax purposes. TAN is a 10-digit alphanumeric number that is used to deduct and collect tax at source from payments made by your company. PAN and TAN can be obtained automatically along with COI by submitting Form SPICe+ on [the MCA portal]. You will receive your PAN and TAN cards within 10 to 15 working days after receiving your COI.
- GST Registration: GST (goods and services tax) is a comprehensive indirect tax that is levied on the supply of goods and services in India. All companies in India must register under GST if their annual turnover exceeds Rs. 40 lakhs (Rs. 20 lakhs for special category states). GST registration can be obtained online by submitting Form GST REG-01 on [the GST portal] along with COI, PAN, bank account details, etc. You will receive your GSTIN (GST identification number) within three working days after submitting your application.
Documents Required to register a Private Limited Company in India
The documents required to register a private limited company in India vary depending on the type of license/service involved. However, some common documents that are required to register a Private Limited Company:
- Identity proof of directors and subscribers (such as PAN card, Aadhaar card, passport, driving license, voter ID card, etc.)
- Address proof of directors and subscribers (such as electricity bill, telephone bill, bank statement, rent agreement, etc.)
- Passport-size photographs of directors and subscribers
- Proof of registered office address of the company (such as electricity bill, telephone bill, rent agreement, ownership deed, NOC from the owner, etc.)
- Specimen signature of directors and subscribers
Some additional documents that may be required to register a Private Limited Company:
- DSC application form and declaration form
- DIN application form and declaration form
- MOA and AOA drafting form.
- Form SPICe+ Part A and Part B
- Form GST REG-01
Steps involved to register a Private Limited Company Online in India
The basic procedure to register a private limited company online in India is as follows:
- Choose a unique and suitable name for your company and apply for its reservation on [the MCA portal] using Form SPICe+ Part A.
- Obtain DSC and DIN for all directors and subscribers from any authorized agency or through [the MCA portal] using Form SPICe+ Part B.
- Draft MOA and AOA for your company using the standard templates or customizing them as per your requirements.
- Apply for incorporation of your company on [the MCA portal] using Form SPICe+ along with MOA, AOA, DSC, DIN, etc.
- Receive COI along with PAN and TAN cards from the MCA within one to two working days after verification.
- Apply for GST registration on [the GST portal] using Form GST REG-01 along with COI, PAN, bank account details, etc.
- Receive GSTIN from the GST Department within three working days after verification.
Cancellation of the Private Limited Company Registration Online
The cancellation of Private Limited Company Registration in India depends on the type of license/service involved. For example:
- Company name approval: This approval is valid for 20 days from the reservation date. It can be canceled by not applying for incorporation within the validity period.
- DSC and DIN: These are valid for a lifetime and do not require any renewal. They can be canceled by surrendering them to the MCA or revoking them due to misuse or fraud.
- MOA and AOA: These are valid until they are altered or amended by the company. They can be canceled by passing a special resolution by the shareholders and obtaining approval from the MCA or by winding up or dissolving the company.
- COI, PAN, and TAN: These are valid for a lifetime and do not require any renewal. They can be canceled by winding up or dissolving the company or surrendering them to the respective authorities.
- GSTIN: This is valid until the company cancels or surrenders it. It can be canceled by applying online on [the GST portal] using Form GST REG-16 along with the required documents and reasons. The GST Department can also cancel it due to any violations or non-compliance with the GST laws and regulations.
The mandatory compliance connected with private limited company online registration in India may vary depending on the type of license/service involved. However, some common compliance that apply to all licenses/services are:
- Maintaining proper books of accounts and records for the company
- Filing annual returns and financial statements with the MCA using Form AOC-4 and Form MGT-7
- Filing income tax returns and paying income tax dues on time
- Filing GST returns and paying GST dues on time (if registered under GST)
- Complying with the Companies Act, 2013 and its rules and regulations
- Complying with any other laws and regulations relevant to the industry, state, and local authorities
Registering a private limited company online in India is a simple and convenient process that offers many benefits for entrepreneurs and businesses. By following the steps and requirements outlined, you can easily incorporate your own private limited company online in India and enjoy the advantages of limited liability, perpetual succession, easy transferability of shares, access to funds, tax benefits, etc. However, you should also be aware of the disadvantages and challenges of running a private limited company, such as higher costs, more compliance, restrictions on share transfer, etc. Therefore, you should carefully weigh the pros and cons of this option and choose the one that best s