Private Limited Company Registration in Kolkata

A Private Limited Company (Pvt. Ltd.) is a business entity registered under the Companies Act, 2013. In this structure, ownership is divided into shares held privately by shareholders. Think of a Private Limited Company as a separate legal person. It's an entity created by law that is distinct from the people who own and run it (the shareholders and directors). This is a crucial concept called a 'separate legal entity'.

What does this mean for you?

• Your personal assets are safe: If the company incurs debts or losses, your personal property, like your house or car, cannot be used to pay them off. Your liability is 'limited' to the amount of money you invested in the company's shares. This is the biggest advantage of this business structure.
• The company can own property: The company can buy, sell, and own assets in its own name.
• It has perpetual succession: The company continues to exist even if the owners or directors change, retire, or pass away. It provides stability and a long-term structure to the business.

A Private Limited Company is privately held, meaning its shares are not offered to the general public. It's managed by a board of directors and owned by shareholders, making it a well-structured and credible business format.

Kolkata is more than just the "City of Joy"; it's a city of opportunity. Here’s why you should start your venture in the city:

• Strategic Location: It's the gateway to Eastern and Northeastern India and a crucial trade link to Southeast Asian countries.
• Cost-Effective Operations: The cost of living and running a business (office rentals, salaries) is significantly lower compared to other metro cities like Mumbai, Delhi, or Bengaluru.
• Skilled Human Resources: With a plethora of reputed universities and colleges such as Jadavpur University and the University of Calcutta, Kolkata has a rich pool of skilled and talented professionals.
• Diverse Economy: The city has a strong base in industries like leather, tea, and textiles, along with a rapidly growing IT, ITeS, and startup sector.

Specific State Government Initiatives for Startups in Kolkata

The West Bengal government has been actively promoting startups and new businesses through initiatives, like:

• Startup Bengal: This is the flagship initiative providing a platform for startups to access mentorship, funding, and incubation support.
• Shilpa Sathi: A single-window online portal that simplifies the process of getting various licenses, registrations, and clearances required to set up and run a business in the state.
• Biswa Bangla: A government initiative to promote the state's traditional arts, crafts, and heritage, creating opportunities for businesses in these sectors.

Kolkata, the vibrant business hub of Eastern India, is witnessing a surge in new startups and businesses. The Private Limited Company structure is overwhelmingly the top choice, and for good reason. Here’s why it resonates so well with the city's entrepreneurial spirit:

• Credibility and Trust: A company registered with the Registrar of Companies (RoC) as a "Pvt. Ltd." automatically gains a level of trust. Banks, suppliers, and customers see it as a more professional and stable entity compared to a sole proprietorship or partnership.
• Ideal for Funding: A Private Limited Company is preferred by investors due to its easy share allocation and a clear legal framework.
• Attracts Talent: Ambitious professionals often prefer to work for a structured company. You can offer Employee Stock Ownership Plans (ESOPs)  to hire and retain top employees easily.
• Scalability: The Private Limited Company structure is built for growth. It's easy to add new shareholders, expand operations, and manage a growing business without having to change the legal structure.

The dynamic business environment in Kolkata, from its traditional industries to the booming IT and startup ecosystem in areas like Salt Lake Sector V, finds the perfect legal backbone in the Private Limited Company model.

Before you begin the registration process of a Private Limited Company in Kolkata, you need to make sure you meet the basic eligibility criteria. The requirements are laid out in the Companies Act, 2013, and are quite straightforward.

Eligibility for Company Registration in Kolkata

Here’s what you need to have in place:

• Directors:
  • You need a minimum of two directors.
  • You can have a maximum of fifteen directors. This can be increased later by passing a special resolution.
  • At least one director must be a resident of India. A person is considered a resident if they have stayed in India for at least 182 days in the previous calendar year.
  • Directors must be at least 18 years old.
• Shareholders (Members):
  • You need a minimum of two shareholders.
  • You can have a maximum of two hundred shareholders.
  • Directors and shareholders can be the same people.
• Capital Contribution:
  • There is no minimum paid-up capital requirement anymore. You can start a company with any amount of capital, say, ₹10,000 or ₹1,00,000.
• Company Name:
  • The name you choose must be unique. It should not be identical or too similar to an existing company name or registered trademark.
  • The name must end with the words "Private Limited".
• Registered Office:
  • You must have a Registered Office Address in Kolkata (or anywhere in West Bengal) where all official communications will be sent. This can be a commercial property or even your residential address initially.

The Ministry of Corporate Affairs (MCA) has streamlined the procedure of Private Limited Company registration in Kolkata through a centralized online system. The entire process is handled through a single, comprehensive web form called SPICe+.

Here’s a step-by-step breakdown:

Step 1: Obtain DSC and DIN

• Digital Signature Certificate (DSC): Before you can file any forms online, the proposed directors need a DSC. A DSC is like a digital version of your physical signature and is used to sign electronic documents. It is a mandatory requirement for the Private Limited Company registration online in Kolkata.
• Director Identification Number (DIN): Every director needs a unique DIN. This is a lifetime identification number. Thankfully, you no longer need to apply for it separately. The DIN is now allotted directly through the SPICe+ form when you are incorporating the company.

Step 2: Choosing and Reserving a Unique Company Name

Your company's name is its identity. You need to check the availability of the Company Registration in Kolkata's name.

Note: You can use the name availability tool to find the right company name.

• The name reservation is done through Part A of the SPICe+ form.
• You can submit two name options in order of preference.
• The name should be unique and reflect your business objects.
• The Registrar of Companies (RoC) will check if the name is available and doesn't violate any naming guidelines. If approved, the name is reserved for you for 20 days, during which you must complete the incorporation process.

Step 3: Drafting the Memorandum of Association (MOA) and Articles of Association (AOA)

These two documents are the constitution of your company.

• Memorandum of Association (MOA): This document outlines your company’s primary objectives and purpose. It also states the company’s name, registered office (West Bengal), authorized share capital, and members’ liability.
• Articles of Association (AOA): This document contains the internal rules and regulations for managing the company. It covers aspects like the powers of directors, the process for issuing and transferring shares, and the procedure for conducting board meetings.

Today, these are prepared as e-MOA (Form INC-33) and e-AOA (Form INC-34) and are filed along with the SPICe+ form.

Step 4: Filing the SPICe+ Form for Incorporation

This is the most crucial step in the Private Limited Company registration. The SPICe+ form is an integrated web form with two parts:

• Part A: For name reservation (as discussed above).
• Part B: This part is used to apply for a host of services in one go:
  • Company Incorporation
  • DIN allotment for directors
  • PAN (Permanent Account Number) for the company
  • TAN (Tax Deduction and Collection Account Number) for the company
  • GSTIN (Goods and Services Tax Identification Number) - optional
  • EPFO (Employees' Provident Fund Organisation) registration
  • ESIC (Employees' State Insurance Corporation) registration
  • Professional Tax registration (mandatory for West Bengal)
  • Opening of a company bank account

Along with the SPICe+ form, you will also need to upload a linked form called AGILE-PRO-S, which covers the applications for GSTIN, EPFO, ESIC, etc. All the documents mentioned in the next section must be scanned and attached to these forms.

Step 5: Receiving the Certificate of Incorporation

Once you submit the SPICe+ form and all the attached documents, the RoC will review your application.

• If everything is in order, the RoC will approve the application and issue the Certificate of Incorporation (COI). This certificate is conclusive proof of your company's existence.
• Along with the COI, you will also receive the company's PAN and TAN electronically.
• The entire process, from name approval to receiving the certificate, can take anywhere from 7 to 10 working days if all your documents are correct.

Having your documents ready is key to a smooth registration process. Here’s a clear list of the documents required for company registration in Kolkata.

For Indian Directors and Shareholders

• PAN Card: A self-attested copy of the PAN card is mandatory for all Indian nationals.
• Identity Proof: A self-attested copy of Aadhaar Card, Voter ID Card, Driving License, or Passport.
• Address Proof: A recent copy (not older than two months) of a Bank Statement, Mobile Bill, or Utility Bill (Electricity/Telephone).
• Photograph: A recent passport-sized photograph of each director and shareholder.

For Foreign Nationals

If any of the directors or shareholders are foreign nationals, the documents need to be notarized or apostilled in their home country.

• Passport: A notarized or apostilled copy of the passport is mandatory.
• Identity Proof: A notarized or apostilled copy of a document, like a driver's license.
• Address Proof: A notarized or apostilled copy of a recent bank statement or utility bill.

For the Registered Office in Kolkata

You need to provide proof of your company's registered address in Kolkata.

• Utility Bill: A recent copy (not older than two months) of an electricity bill, telephone bill, or gas bill for the registered office premises.
• No Objection Certificate (NOC): A letter from the owner of the property stating that they have no objection to you using their premises as the registered office of the company.
• Rental Agreement (if applicable): If the property is rented, a copy of the valid rental agreement.

A simple checklist of all the documents you will need

• Self-attested PAN card copies for all directors/shareholders.
• Self-attested address proof (like Aadhaar/Voter ID) for all.
• Latest utility bill or bank statement as address proof for all.
• Passport-sized photos for all.
• For the registered office: the latest utility bill and an NOC from the owner.
• If the office is rented, a copy of the rent agreement.

Knowing the registration costs helps you plan your budget effectively. The total cost can be divided into Government Fees, Professional Charges, and Post-Registration Expenses.

Government Fees and Stamp Duty

Name Reservation Fee: Reserving a company name using the RUN service costs ₹1,000.

Incorporation Fees: Fees depend on the company’s authorized share capital:

• Up to ₹1 lakh: ₹5,000
• ₹1 lakh to ₹5 lakh: ₹5,000 + 0.01% of the excess
• ₹5 lakh to ₹1 crore: ₹5,400 + 0.005% of the excess
• Above ₹1 crore: ₹10,150 + 0.001% of the excess

Stamp Duty: Stamp duty is payable on the MOA and AOA. It varies based on authorized capital, typically ranging from ₹135 to ₹15,020 for capital up to ₹1 lakh.

PAN & TAN Application Fee: ₹443

Professional Charges

Most entrepreneurs hire professionals like CAs or Company Secretaries to handle documentation and filings. Fees typically include:

• Assistance with DSC and DIN applications
• Drafting MOA and AOA
• Filing SPICe+ and other forms
• Following up with ROC until the Certificate of Incorporation is issued

Estimated Cost: Around ₹1,999 for Indian clients; higher for foreign or NRI applicants.

Digital Signature Certificate (DSC): ₹2,500 per DSC (for each director/subscriber).

Post-Registration Expenses

After incorporation, there may be additional costs such as:

• Company seal and stationery: ₹500 – ₹1,500
• Bank account opening charges (varies by bank)
• GST registration fees (if applicable)

Potential Penalties for Non-Compliance

Failing to meet statutory requirements can lead to fines:

• Late Annual Return (Form MGT-7) or Financial Statements (Form AOC-4): ₹100/day, up to ₹5 lakh
• Missing board meetings: ₹25,000 for company, ₹5,000 per officer
• Non-maintenance of statutory registers: up to ₹10,000 + ₹1,000/day
• Non-disclosure of interest by directors: up to ₹1 lakh
• CSR non-compliance: Company fined up to ₹50,000, officers up to ₹1 lakh + ₹5,000/day

You must have a physical Private Limited Company registration office in Kolkata or anywhere else in West Bengal.

• You cannot use a P.O. Box address.
• It's perfectly acceptable to use your residential address as the registered office initially to save costs. You can change it to a commercial address later.
• Ensure you have all the required documents for the address, especially the NOC from the property owner.

After registering your Private Limited Company in Kolkata, you will need to comply with certain state-level regulations:

• Professional Tax (PT): Registration for PT is mandatory for all companies in West Bengal. It is a tax levied on professionals and is deducted from the salaries of employees.
• Shops and Establishments Act: If you have a commercial establishment, you will need to register under this act.
• Trade License: You will need to obtain a trade license from the local municipal corporation (like the Kolkata Municipal Corporation - KMC).

Getting the Certificate of Incorporation is just the beginning. To keep your company legally active and avoid penalties, you must fulfill several post-registration compliances.

• Opening a company bank account

The first step after incorporation is to open a current account in the name of your company at any bank. You will need to submit the COI, MOA, AOA, and the company's PAN card, along with the board resolution authorizing the opening of the account.

• First board meeting within 30 days

You must conduct the first meeting of your company's Board of Directors within 30 days of its incorporation. In this meeting, you will formally take on record the Certificate of Incorporation, appoint the first auditor, and authorize the opening of the bank account.

• Appointment of the first auditor

The Board of Directors must appoint the company's first statutory auditor (a practicing Chartered Accountant) within 30 days of incorporation. The auditor's role is to audit the company's financial statements annually.

• Issuance of share certificates

The company must issue share certificates to all the shareholders within 60 days (two months) of incorporation.

• Filing for commencement of business (Form INC-20A)

This is a mandatory compliance. Within 180 days of incorporation, you must file a declaration with the RoC in Form INC-20A. This form declares that every subscriber to the MOA has paid the value of the shares agreed to be taken by them. You cannot commence any business activities or borrow money until this form is filed.

Annual Compliance to Keep in Mind

Every year, a Private Limited Company has to fulfill several compliances:

• Conducting Board Meetings: A minimum of four board meetings must be held each year.
• Annual General Meeting (AGM): One AGM must be held every year.
• Filing Financial Statements (Form AOC-4): You must file your company's audited balance sheet and profit and loss account with the RoC every year.
• Filing Annual Return (Form MGT-7): This form contains details about the company's directors, shareholders, etc., and must be filed with the RoC annually.
• Income Tax Return: The company must file an income tax return every year.