Private Limited Company : Explanatory Guide

Private Limited Company : Explanatory Guide

One of the most highly recommended methods for starting a business in India is to establish a private limited company, which provides its shareholders with limited liability while imposing certain ownership restrictions. When it is LLP, the partners will manage it. On the other hand, a private limited company allows for directors and shareholders to be separate entities.

As your dependable legal advisor, Vakilsearch offers a cost-efficient service for registering your company in India. We handle all legal procedures and ensure compliance with the regulations set forth by the Ministry of Corporate Affairs (MCA). Upon successful completion of the pvt company registration process, we provide you with an Incorporation certificate (CoI), as well as PAN and TAN documents. With these in hand, you can easily establish a current bank account and commence your business operations.

Benefits of Pvt Ltd Company Registration

There are numerous advantages to registering a company. By doing so, you enhance the credibility of your business, which can lead to increased consumer trust. Additionally, company registration can provide various benefits that can help your business to grow and succeed.

  • Shield from personal liability and protects from other risks and losses
  • Attract more customers
  • Procure bank credits and good investment from reliable investors with ease
  • Offers liability protection to protect your company’s assets
  • Greater capital contribution and greater stability
  • Increases the potential to grow big and expand

Checklist for Private Limited Company Registration in India

As defined by the Companies Act, 2013 one must guarantee to meet the checklist requirements without fail for Private Limited Company Registration in India.

Two Directors:

A private limited company must have at least two directors, with a maximum of fifteen. A minimum of one of the company's directors must be a resident of India.

Unique Name

The name of your pvt ltd company must be unique. The suggested name should not match with any existing companies or trademarks in India.

Minimum Capital Contribution:

There is no minimum capital amount for a Pvt ltd company. A Pvt limited company should have an authorised capital of at least ₹1 lakh.

Registered Office:

The registered office of a pvt ltd company does not have to be a commercial space. Even a rented home can be the registered office, so long as an NOC is obtained from the landlord.

Steps For Company Registration in India

Startups in India can gain an edge over non-registered competitors by registering their company. While the process of registration is getting complicated and involves numerous compliance requirements, need not worry as Vakilsearch is here to assist you every step of the way. Our team of professionals can provide comprehensive support for pvt company registration.

Step 1: RUN Name Approval

The first step of company registration involves the registration of your desired name. To reserve a name for your company, you must first submit a request for name approval to the Ministry of Corporate Affairs (MCA). You may include one or two potential names, along with a description of your business objectives, in your application for name approval. If your first choice is not approved, you may submit one or two additional names for consideration. Typically, the MCA approves name requests within five business days. Our team of experts can help you choose the ideal name for your company and guide you through the government registration process.

Step 2: Directors' Digital Signature Certificate (DSC)

The MCA in India does not recognize traditional signatures. Instead, all filings with the MCA must include a digital signature certified by an Indian certification authority. Thus, it is mandatory for directors to have digital signatures prior to the company's incorporation.

Vakilsearch will obtain a digital signature certificate (DSC) for the directors through a recognized certification entity. To obtain a digital signature, directors must provide a copy of their identification documents and successfully complete a video KYC process. If a director is a foreign national, the nearest embassy should apostille their passport and other documents for company registration.

Step 3: Submitting the Company Incorporation Application

After obtaining the necessary digital signatures, submit the incorporation application in SPICe form along with all relevant attachments to the MCA. The application for incorporation includes the company's Memorandum of Association (MOA) and Articles of Association (AOA). If the MCA deems the incorporation application to be complete and acceptable, the company can get the Incorporation certificate and PAN. Typically, the MCA approves all incorporation applications within five business days.

Private Limited Company Registration Compliances

After the process of company registration in India, it is necessary to adhere to various compliance regulations in order to avoid potential fines and legal repercussions. Some of the key post-registration requirements include:

Auditor Appointment: Within 30 days of incorporation, every Indian company must appoint a practising, certified, and registered Chartered Accountant(CA).

Director DIN KYC: Every year, individuals who possess a Director Identification Number (DIN) should undergo a DIN KYC process. During the company incorporation process, the company can get the DIN. This helps to verify the phone number and email address on file with the MCA.

Commencement of Business: The shareholders of the company must deposit the subscription amount specified in the MOA within 180 days of incorporation, and the company must create a bank current account. Therefore, to receive a business incorporation certificate, the shareholders of a company established with a paid-up capital of ₹1 lakh must deposit ₹1 lakh into the company's bank account. They should also file a copy of the bank statement with the MCA.

MCA Annual Filings: Every financial year, the MCA must get a copy of the financial statements from each company registered in India. A corporation that incorporates between January and March may elect to include the first MCA annual return in the annual filing for the following fiscal year. Forms MGT-7 and AOC-4 are the components of the MCA yearly return. The Directors and a working professional must digitally sign both of these documents.

Income Tax Filing: Every financial year, businesses should file an income tax return using form ITR-6. The business should file the income tax before the deadline for each financial year, irrespective of the date of incorporation. The company's income tax return must be digitally signed using the director's digital signature.

Requirements to Start a Private Limited Company

Before incorporating a firm, it must meet a specific set of conditions. The following are such conditions:

1. Directors and Members

As mentioned earlier, at least two directors and no more than 200 members are necessary for legal Private Limited Company Registration in india. This is a mandatory requirement as per the Companies Act of 2013. The Directors should honor the following conditions:

  • Each directors should carry a DIN issued by the MCA
  • One of the directors must be an Indian resident, which means they must have spent at least 182 days there in the previous calendar year.

2. The Business's Name

When selecting a name for a private limited company, there are two factors must be into consideration:

  • Name of the principal activity
  • Private Limited Company

3.Address of the registered office

Upon completion of the registration process, the company should give the permanent address of the business's registered office to the company registrar. The registered office is the primary location where business takes place and stores all documentation pertaining to the company.

4. Getting Additional Documents

To verify the authenticity of electronically submitted documents, every business must obtain a DSC. Furthermore, the business needs credentials from such professionals as secretaries, chartered accountants, and cost accountants that engage them for various operations.

Comparative List of Different Types of Business Structures in India

Company typeIdeal forTax advantagesLegal compliances
Limited Liability PartnershipEnterprises that focus on services or require little investmentAdvantage on depreciationCompany tax returns to be pointed ROC returns to be filed
One Person CompanySole proprietors peeking to limit their liabilityTax holiday for first 3 years under Startup India Higher advantages on depreciation No tax on compensation distributionBusiness recoveries to be filed Limited ROC compliance
Private Limited CompanyCompanies that have a high turnoverTax holiday for first 3 years under Startup India Higher advantages on depreciationBusiness tax returns to be filed ROC returns to be filed An audit is mandatory
Public Limited CompanyCompanies with a an increased turnoverTax exemptions underBusiness tax returns to be filed. Compulsory Audits

Documents Required for Online Company Registration

The MCA requires proper identity and address proof for private limited company registration in India. The following documents are the requirements for registering a company in India:

Identity and Address Proof

  • Scanned copy of PAN card or passport (foreign nationals & NRIs)
  • Scanned copy of voter ID/passport/driving license
  • Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
  • Scanned passport-sized photograph specimen signature (blank document with signature [directors only)

Registered Office Proof

  • Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
  • Scanned copy of notarised rental agreement in English
  • Scanned copy of no-objection certificate from the property owner
  • Scanned copy of sale deed/property deed in English (in case of owned property)

Note: Your registered office need not be a commercial space; it can be your residence too.

Reasons to Consider Vakilsearch for Private Limited Company Registration

Vakilsearch offers a completely online private limited company registration process, allowing you to register your entity without leaving the comfort of your home. Our experts can complete the entire incorporation process within 14 days.

Vakilsearch company registration package includes:

  • DIN and DSC for two Directors
  • Drafting of MoA & AoA
  • Registration fees and stamp duty
  • Company incorporation certificate
  • Company PAN and TAN
  • Zero balance current account - Powered by DBS bank

By following these steps, you can begin the process of forming your own private limited company. It is advisable to seek advice from professionals to make informed decisions and ensure seamless growth.

The Glossary


An addition to, deletion from, or a change of existing provisions of the articles of incorporation of a domestic corporation.

Board of Directors

The governing body of a corporation who is elected by shareholders. The directors are responsible for selecting the officers and the supervision and general control of the corporation.

Certificate of Incorporation

The title of the document filed in many states to create a corporation. Also known as the articles of incorporation.


The DSC (Digital Signature Certificate) is an instrument issued by certifying authorities by which you can sign electronic documents. As all documents needed are electronic.


Director Identification Number


The statutory procedure that terminates the existence of a domestic corporation.


The act of creating or organizing a corporation under the laws of a specific jurisdiction.

Limited Liability Company (LLC)

An artificial entity created under and governed by the laws of the jurisdiction in which it was formed. Limited liability companies are generally able to provide the limited personal liability of corporations and the pass-through taxation of partnerships.

Limited Personal Liability

The protection generally afforded a corporate shareholder, limited partner or a member of a limited liability company from the debts of and claims against the company.

Name Reservation

A procedure that allows a company to obtain exclusive use of a corporate name for a specified period of time.

Registered Office

The statutory address of a corporation. In states requiring the appointment of a registered agent, it is usually the address of the registered agent.

Created & Posted Kartar

Accountant at TAXAJ

TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you a One Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are: Launch Your Start-Up Company/BusinessTrademark & Brand RegistrationDigital MarketingE-Stamp Paper OnlineClosure of BusinessLegal ServicesPayroll Services, etc. For any further queries related to this or anything else visit TAXAJ


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