Private Limited Company Registration in Bihar

A Private Limited Company in Bihar, much like in the rest of India, is a business structure governed by the Companies Act, 2013, and is overseen by the Ministry of Corporate Affairs (MCA). This entity has a separate legal identity from its owners (shareholders), offering them the critical benefit of limited liability, which protects their personal assets from business debts and losses.

The key features of a Private Limited Company (Pvt. Ltd. Co.) are:

• Restricted Share Transfers: Shares cannot be freely traded on a public stock exchange. Transfers are typically subject to restrictions outlined in the company's articles of association.
• Limited Members: The company can have a maximum of 200 shareholders.
• No Public Invitation: It is prohibited from inviting the public to subscribe to its shares or debentures.

In Bihar, and particularly in Patna, the process of registering a Private Limited Company has become more streamlined due to state-level initiatives aimed at creating a business-friendly ecosystem. These efforts have led to a noticeable increase in new company registrations, with Patna emerging as a key hub for new incorporations.

A Private Limited Company is the preferred business structure in Bihar because it offers a strong blend of legal protection, credibility, and growth opportunities. Bihar’s rising economic importance, developing infrastructure, and supportive state policies create a favorable environment for this type of business.

• Limited Liability Protection: In Bihar’s evolving business ecosystem, this ensures that a shareholder’s personal assets remain safe from company debts, creating a secure financial foundation.
• Enhanced Credibility: Operating as a Private Limited Company in Bihar’s competitive markets, especially in sectors like agriculture, food processing, textiles, and services, boosts trust with clients, partners, and investors, making it easier to attract funding and contracts.
• Simplified Capital Raising: Private Limited Companies in Bihar can issue shares to private investors, allowing startups and growing businesses to access capital quickly without depending solely on personal savings.
• Separate Legal Entity: The company exists as an independent legal entity, capable of owning assets, signing contracts, and engaging in litigation in its own name. This legal independence is a major advantage for entrepreneurs looking to scale in Bihar.
• Smooth Ownership Transfer: Shares of a Private Limited Company can be transferred or sold, enabling smooth business succession and attracting external investors to Bihar-based businesses.
• Proactive Government Support: The Bihar government supports entrepreneurship through initiatives like the Bihar Industrial Investment Promotion Policy and state-specific startup programs, offering incentives, tax benefits, and subsidies to new ventures.
• Strategic Location and Economic Growth: With its central position in Eastern India, rich natural resources, and improving connectivity, Bihar is emerging as a growth hub. The state’s rising Gross State Domestic Product (GSDP) and focus on industrial development make it an attractive destination for new businesses.

To register a Private Limited Company in Bihar, you must meet the following key eligibility requirements set by the Ministry of Corporate Affairs (MCA):

• Minimum Directors & Shareholders: A minimum of 2 directors and 2 shareholders is required. The same individuals can hold both roles, which is common for startups. At least one director must be a resident of India, having lived in India for at least 182 days in the previous year. Moreover, the director and shareholders should be at least 18 years of age.
• DSC: A Digital Signature Certificate (DSC) is mandatory for all proposed directors. It serves as a secure digital identity for signing online incorporation forms submitted to the MCA.
• DIN: Every director must have a Digital Identification Number (DIN), a unique lifetime identification number issued by the MCA. For up to three directors, the DIN is automatically allotted through the SPICe+ incorporation form.
• Unique Company Name: The proposed name must be unique and not similar to any existing company or registered trademark in India. It must also end with the words "Private Limited".
• Registered Office Address: A valid office address in Bihar is required. This can be a commercial, co-working, or residential space. You must provide valid address proof, such as a recent utility bill or a property tax receipt. If the property is rented, a lease/rent agreement and a No Objection Certificate (NOC) from the landlord are also required.

The registration process for a Private Limited Company in Bihar is entirely online, managed by the MCA through a single, integrated form.

Step 1: Obtaining DSC and DIN

First, all proposed directors must obtain a DSC and a DIN.

• Digital Signature Certificate (DSC): This is a secure digital key used for electronically signing all documents and forms submitted to the MCA.
• Director Identification Number (DIN): The DIN is a unique, lifetime identification number issued by the MCA to every individual who intends to be a director of a company.

Step 2: Choosing and Reserving a Unique Company Name

The company's name is its brand identity, and it's essential to reserve a unique one.

• The proposed name must be distinct and not identical to any existing company or registered trademark.
• It should end with the words “Private Limited” and must be relevant to the business activity.
• You can submit up to two name options for approval through the MCA portal.

You can also use our company name check tool to verify the availability of your chosen name.

Step 3: Drafting the MOA and AOA

These are the fundamental legal documents that govern the company.

• The Memorandum of Association (MOA) outlines the company's constitution, objectives, and powers.
• The Articles of Association (AOA) define the internal rules and regulations for the company's management.

Step 4: Filing the SPICe+ Form for Incorporation

The SPICe+ Form is the main application form for registration. It is a comprehensive online form that combines multiple services into a single application, including:

• Name reservation
• Company incorporation
• Allotment of DIN
• Application for PAN and TAN
• Mandatory registration with ESIC and EPFO
• Opening a company bank account
• Professional tax, if applicable

This single form significantly reduces the time and effort required for the entire registration process.

Step 5: Receiving the Certificate of Incorporation

This is the final step that legally establishes your company.

• Once the MCA verifies and approves your application, it will issue the Certificate of Incorporation (COI).
• This is a digital certificate that legally confirms your company's existence.

The company’s PAN and TAN will also be issued along with this certificate.

The documents required for registration are submitted electronically and must be self-attested.

The total cost includes government fees and professional charges, which vary based on factors like authorized share capital.

After registration, your company must follow several mandatory compliances to maintain legal standing.

• Open a Company Bank Account: Within a few days of receiving your Certificate of Incorporation (COI), you must open a current bank account in the company’s name for all business transactions.
• First Board Meeting: The first meeting of the Board of Directors must be conducted within 30 days of incorporation.
• Appointment of First Auditor: The Board of Directors must appoint the company's first auditor within 30 days of registration.
• Issuance of Share Certificates: Share certificates must be issued to all shareholders within 60 days of the company’s incorporation.
• Filing for Commencement of Business (Form INC-20A): This form must be filed within 180 days of incorporation, declaring that the subscription amount has been received from shareholders and the company is ready to begin operations.
• Annual Filings: Every Private Limited Company in Bihar must file its financial statements (Form AOC-4) and annual return (Form MGT-7) with the Registrar of Companies (RoC) annually.
• Board Meetings: Companies must hold board meetings regularly, at least four times a year for larger companies and at least twice a year for smaller ones.

If you plan to expand beyond Bihar, you can also explore setting up a Private Limited Company in Uttar Pradesh.