Private Limited Company also called close corporation is a type of legal business entity which can be incorporated by two or more Person (Members) and where liability of member’s are limited. In India, members i.e., shareholders of such companies are limited to 200. Further these companies are restrained from inviting capital and deposits from the public.Private Limited Company Registration gives a sense of security to Shareholders/Members of the company holding fully-paid up shares of the company. Unlike in a proprietorship or partnership where the proprietor and partner are personally liable for all the claims and debts to outsiders, a company limited by shares is responsible for its own liabilities and debts i.e, the Shareholders/Members of the company holding fully-paid up shares of the company have no further liability to pay any amount even if the company is declared insolvent.
Corporations and industries want to do business with an incorporated entity instead of sole traders. After Registration of Private Limited Company, it creates a professional and corporate image and are considered to be more established, credible and committed type of business entity. Sense of security is also provided to banks, venture capitalist, industry professions while investing in the company.Incorporation of Private Limited Company formalizes your existence business and also attract investment. Registration of a Company with @EmpressaLegal.com is efficient and convenient with all the online process system, which has helped entrepreneurs across India and abroad to incorporate their businesses in a fast and secure manner.
Limited Liability Protection
If Shareholders/Members holds fully-paid shares of the company, they have no further liability to pay any amount even if the company is declared insolvent. It has the words ‘Private limited’ as part of its name.
Never ending characteristic
Directors or shareholders may come and go in the company, but a company never dies with the outgoing of shareholders or Directors. A company can, only be closed with the consent of shareholders or by the process given in Law.
No Criteria of minimum paid up capital
There is no requirement of minimum capital to start a Private Limited Company.
A company being a legal person is distinct from its directors and shareholders. Member cannot claim the property vested in company’s name. The company is capable of owning, enjoying and disposing of property in its own name.
Name of the Company is protected
The Registrar of companies does not allow another name which are identical, similar or nearly resembles with the existing name of a Private Limited Company.
Obtain Digital Signature Certificate
DSC is required to sign forms electronically for incorporation/ registration of Private Limited Company. It ensures security and authenticity of the documents and can be obtained from any of the government approved vendor like MTNL, TCS, IBDRT, NIC, e-Mudhra, n-Code solutions.
Obtain Director Identification Number
No person can become a director in any private limited company without obtaining Director Identification Number (DIN). It implies a unique number that is assigned to the directors of Company for their identification. DIN once obtained is valid for lifetime.
The proposed names for the private limited company first need to be checked if they are available for registration or not. If the name is available, application for reservation of name is made to the Registrar of Companies (ROC) and once the approval is received form the ROC, name is available for 60 days.
After name approval we prepare Incorporation/Registration documents of Private Limited Company which Includes Memorandum and Article of Associations, declaration, affidavits etc. All the documents for incorporation along with the application form are submitted electronically on the MCA portal.
Certificate of Incorporation
Once the Registration forms are scrutinized and approved by Registrar of Companies (ROC), Certificate of Incorporation is issued. After receiving the certificate of Incorporation the company is set to roll out its function.
PAN and Bank Account of the company
After getting Certificate of Incorporation of the Company, we apply for allotment of PAN Card which is allotted in 7-10 days from the date of application. Further you need to open Bank Account of the company for transactions.