How to register Private Limited Company in India ?

Private Limited Company is a popular option to start a business in India by startups and businesses with higher growth aspirations. Private Limited Company is incorporated under the Companies Act of 2013, and governed by the Ministry of Corporate Affairs (MCA). It is a registered corporate structure, that provides business a separate legal identity from its owners.

Features

Feature of the private limited company are the following.

  • The liability of members is limited up to share capital they contribute.

  • Ability to raise equity funds

  • Separate legal entity status

  • Perpetual Existence: A company, being a separate legal person, is unaffected by the death or cessation of any member and continues to be in existence irrespective of the changes in membership. A company has perpetual existence until it is legally dissolved. 

Eligibility Criteria

According to the Company Act, 2003, in order for any company to be registered in India, the below conditions have to be met.

  1. Two Directors: A private limited company must have at least two directors and at most, there can be 15. Of the directors in the business, at least one must be a resident of India.

  2. Unique Name: The name of your company must be unique. The suggested name should not match with any existing companies or trademarks in India.

  3. Authorized Capital Contribution: A company should have an authorized capital of at least Rs. 1 lakh. It doesn't mean that you should have that much amount with you.

  4. Registered Office: The registered office of a company does not have to be a commercial space. Even a rented home can be the registered office, as long as a NOC is obtained from the landlord.

Documents Required

Following documents are required for registration of Private Limited Company in India.

  • Identity Proof:  Any of Aadhar Card/Driving License/Election Id Card/Passport

  • Address Proof of Business: Utility Bill (not older than 2 months) , Rent Agreement and NOC

  • Pan Card

  • Passport size photograph

  • DIR-2 along with identity and address proofs of directors

  • Declaration from directors

  • Identity proof and address proof and PAN of proposed directors not having DIN

Checklist

Most steps are sequential and depend on an earlier step being completed. The full process will take at least 10 days to complete. Following are the steps involved in application for DSC.

  1. Apply for Digital Signature Certificate (DSC) 

    Physical documents are signed manually, similarly, electronic documents, for example e-forms are required to be signed digitally using a Digital Signature Certificate.

    A digital certificate can be presented electronically to prove one’s identity, to access information or services on the Internet or to sign certain documents digitally.

  2. Check for Company’s Name availability

  3. File SPICe form along with e-MoA and e-AoA

    SPICe is Simplified Performa for Incorporating Company electronically.It is a single form for company registration.

  4. Obtain Certificate of Incorporation, PAN and TAN

Apply for Digital Signature Certificate

  • Apply for DSC from any of the DSC Certifying Authority.

  • DSCs are required for filling of e-forms on the online portal of Ministry of Corporate Affairs (MCA).DSC is a digital proof of authorization for online transactions and filing certain documents. 

  • You must obtain either class 2 or class 3 category of DSC. Under Class 2 category, the identity of a person is verified against a pre-verified database whereas, under class 3 category, the person needs to present himself before registering authority to prove their identity

Check for Company's name availability

  • Check whether your company name exist or not. Link

  • For company name reservation, DSC and DIN are not required. Only the Ministry of Corporate Affairs (MCA) account is required. So you can reserve name of company in this step or as part of filing SPICe form.

  • If you want to reserve it now, follow the below steps. 

  • Visit Ministry of Corporate Affairs website. Click on "MCA Services". Then Click on "RUN (Reserve Unique Name)" for reserving company name.

File SPICe form

SPICe (Form INC-32) is a single form for

  • Allotment of Director Identification Number (DIN)

  • Reservation of name

  • Incorporation of company

It is accompanied by the documents envisaging the details of

  • Directors & Subscribers

  • e-MoA (Form INC 33). e-MoA refers to electronic Memorandum of Association

  • e-AoA (Form INC 34). eAoA refers to electronic Articles of Association

Once SPICe form is approved, you will get incorporation certificate which will include the date of incorporation and PAN number of the company. TAN shall be send separately to address of company separately.

Submit SPICe form

Obtain Incorporation document, PAN and TAN

Once the application submitted along with the SPICe forms are reviewed and verified and if the Registrar finds it satisfactory, the Certificate of Incorporation is issued with the date of incorporation along with the Permanent Account Number (PAN) of the company which will be attested by the seal and signature in electronic form.

Cost of Registration

Cost of company registration depends on the following factors:

  1. DSC : The fee for obtaining DSC varies depending upon the certifying agency. Also, fee for DSC depends on the number of directors applying for Director Identification Number. Normally, for 1 DSC, it will cost INR 1000 -1500. As minimum 2 directors are required, total cost is INR 2000 - 3000. 

  2. SPICE Form Filing fee: INR 500

  3. Filing Fee of MoA : INR 2000

  4. Stamp duty will change depending on your State. Stamp duty on MoA, AoA and SPICe: INR 500

  5. Non-Judicial Stamp paper and Notary : INR 300

Total Cost for Company Registration will vary from INR 5300 - INR 6300

Time Required

On an average, it takes up to 15 days to register a Private Limited Company subject to document verification by MCA and the processing time is dependent on a case to case basis. 

Application Forms

FAQs

What is the process of obtaining DSC from Certifying Authority?

  • Digital Signature Certificate (DSC) Applicants can directly approach Certifying Authorities (CAs) with original supporting documents, and self-attested copies will be sufficient in this case

  • DSCs can also be obtained, wherever offered by CA, using Aadhar eKYC based authentication, and supporting documents are not required in this case

  • A letter/certificate issued by a Bank containing the DSC applicant’s information as retained in the Bank database can be accepted. Such letter/certificate should be certified by the Bank Manager .

What are the different types of Digital Signature Certificates valid for MCA21 program?

The different types of Digital Signature Certificates are:

  • Class 2: Here, the identity of a person is verified against a trusted, pre-verified database.

  • Class 3: This is the highest level where the person needs to present himself or herself in front of a Registration Authority (RA) and prove his/ her identity.

How can I apply for a Company Name?

A proposed name can be reserved for the purpose of incorporation of a company or change of name of an existing company through the RUN service by logging into the MCA portal along with a fee of Rs. 1000/-.
Further, you may use the SPICe form for the integrated process of name reservation and incorporation of a company.

Can I apply for a company name online?

Yes, you can avail the RUN service at MCA portal for reserving a name online

What is the validity period of the Name approved?

An approved name is valid for a period of

  • 20 days from the date of approval (in case name is being reserved for a new company) or

  • 60 days from the date of approval (in case of change of name of an existing company)

What should I do, if I fail to make payment of challan of SPICe (INC-32) before expiry date?

In such a case, you need to file Form SPICe (INC-32) again but same can be filed only after 15 days from the Challan Date. On attempting to file Form SPICe (INC-32) before the expiry of above said period, the system will give an error message "Form SPICe (INC-32) has already been filed ".

My SRN is marked as 'Defective'. What should I do?

In case of STP forms, for example annual forms MGT-7 & AOC-4, AOC-4 XBRL etc, if there is any defect or incompleteness, same is marked by the RoC as ‘Defective’. You are required to file such form afresh after rectifying the defects/ incompleteness with payment of fee and additional fee, as applicable.