In India, a Private Limited Company Registration is the most popular form of organization to start a business as a start-up as it has many advantages in comparison to any other business entity. It is very easy to register a private limited company because the complete procedure is online there is no need to go anywhere and visit any office to get the certificate. The company is registered with the Ministry of Corporate Affairs (MCA) through the Registrar of Companies (ROC) in whose jurisdiction the registered office of the company is located. Minimum 2 persons are required to start a private limited as director and shareholder (both persons can be the same or different as well). There is no specific educational qualification is required to appoint a director in the company.
After getting registered with the MCA the company has to maintain all the records and documents and also has to comply with all the compliances whether the company is small or large or the company is One person company or public limited company, if any company fails to comply with the compliances, then the company has to pay penalty on every default. The mandatory compliances which the companies have to do every year to maintain the active status on MCA’s database are known as annual compliance.
The procedure to register a company is as follows:
- Name reservation application: The name is a very essential part of every business organization because it is not just the name but it is the identity of the organization and it is very important to get it reserved through the government. So before filing the registration application it becomes important to apply for a name reservation and once it is reserved it is valid for 20 days only and within these days the procedure must be completed.
- Digital signature certificate: The directors and shareholders must have DSC at the time of incorporation of the company as the forms are needed to be signed by the DSC only then the registrar will accept the form and proceed further. The DSC is equivalent to the physical signature therefore it is as valid as a physical signature.
- Drafting & signing of documents: After name approval, the documents shall be drafted and the same shall be signed by the directors and shareholders of the company. These documents shall have all the details of the company and its business activity, rules, regulations, address, etc. and complete information of its directors & shareholders.
- Preparation & submission of forms: After completion of the preparation of documents and DSC the final form shall be prepared and the same shall be signed by the DSC and then ready to file to the registrar.
- Issuance of certificate of incorporation: After examining all the documents and forms the registrar will issue a certificate of incorporation. Along with the certificate of incorporation, the registrar will allot PAN, TAN, DIN of the directors.
After the registration, the company has to appoint an auditor within 30 days from incorporation and open a bank account and file commencement of business within a year from the date of registration. Apart from these, the company has to do annual compliances every year within the specified time limit.
There is one alternate option of the private limited company is Limited Liability Partnership as it also has the features like companies and it is also good option to start the business.