Private Limited Company Registration in India

A company whose shares may not be offered to the public for sale and which operates under legal requirements less strict than those for a public company. A private company is a firm held under private ownership. Private companies may issue stock and have shareholders, but their shares do not trade on public exchanges and are not issued through an initial public offering (IPO).

Prerequisites to incorporate a Private Limited Company-

The number of members must be between 2 - 200.
There must be at least two directors and two shareholders.
Each director must have a Directors Identification Number (DIN).
PAN card copy of directors/shareholders. Passport copy for NRI subscribers.

The company needs to provide address proof for incorporation. But the Ministry of Corporate Affairs (MCA) allows a residential address to be used as the company’s registered address. Thus any address can be provided as the registered address.

SPICe INC 32 is very similar to INC 29, which was being used to incorporate companies but the significant difference between the two forms is that in the new SPICe INC Form 32, there is a provision for entering name approval that was already obtained by the applicant, whereas in the form INC 29, there was no provision for entering a previously obtained name approval leading to chances for submission and rejection. A maximum of three directors can use the integrated form of SPICe INC 32 for filing application for allotment of DIN.

Private Company Incorporation Process

➡ ➡

Obtain DSC-Digital signature Certificate in Electronic Format from Government Recognized Certifying Agencies

➡ ➡

Register Your Director by Applying for Din-Director Identification Number (in Form DIN 3 in existing company or directly with SPICe INC 32 upto 3 directors)

➡ ➡

Obtain Name approval Certificate in RUN Form(Reserve Unique Name) or directly apply with SPICe INC 32 -in both cases 2 chances are given with one Resubmission(RSUB)

➡

Enlist the Company's Constitution in Memorandum of Association (MOA) and Articles of Association(AOA) in e-(AoA) directly with SPICe INC 32

➡

To get the Company Identification Number -(CIN) address for the Registered Office and NOC from the Landlord is required

➡ ➡

Private Company Incorporated

➡ ➡

Current Bank Account to be opened in Company's Name

➡ ➡

Application for Goods and Services Tax Identification Number(GSTIN), Employees State Insurance Corporation Registration(ESIC) plus Employees Provident Fund Organization(EPFO) registration(AGILE-PRO) in Form INC 35

Apply For PAN and TAN with SPICe INC 32

Get the Certificate Of Incorporation -(COI) issued by ROC with the PAN & TAN

➡ ➡

Apply For PAN and TAN

Get the Certificate Of Incorporation -(COI) issued by ROC with the PAN & TAN

➡ ➡

Application for Goods and Services Tax Identification Number(GSTIN), Employees State Insurance Corporation Registration(ESIC) plus Employees Provident Fund Organization(EPFO) registration(AGILE-PRO) in Form INC 35

➡ ➡

Current Bank Account to be opened in Company's Name

Private Company Incorporated

Documents required for filing SPICe (INC-32)

Where director and subscriber are Indian Nationals

An Affidavit on a Stamp Paper is to be given by all the subscribers of the Company to state their willingness to become the shareholders of the Company
Proof of office address – Rental Agreement
Copies of utility bills that are not older than two months
Copy of approval in case the proposed name of the company contains any word(s) or expression(s) that require approval from central government
Copy of approval in case the proposed name of the company contains any word(s) or expression(s) that require approval from central government
NOC(No Objection Certificate) from the owner of the property
In case of subscribers/ Director does not have a DIN, it is mandatory to attach, proof of identity and address proof of the subscribers

Where director/subscriber is a foreign National

Passport
Address proof: It can be driving license, residence card, bank statement, Government issued form of identification containing an address

Registered office proof: It can be registered document which shows the title of the premises in the name of the company or notarized copy of lease deed or rental agreement

Annual Compliances for Private Limited Company- Checklist

First Board Meeting

Holding of First Board Meeting of Directors within 30 days of incorporation of Company.

Subsequent Board Meeting

Holding of minimum four Board Meetings in a calendar year and not more than 120 days gap should be there between two meetings.
For Small Company, minimum two meetings in each half of calendar year with minimum gap of 90 days.

First Annual General Meeting

Within a period of Nine months from the date of closing of the first financial year of the company

Subsequent Annual General Meeting

Within a period of six months from the date of closing of the first financial year
Not more than fifteen months shall elapse between the date of one annual meeting of a company and that of the next.

Disclosures of interest by Directors/Declaration

Every Director shall in the first Board meeting of the Board in every financial year disclosure his interest in form MBP-1 and declaration in form DIR-8

Appointment of First Auditor

Appointment of first auditor in Board meeting within 30 days of incorporation

Appointment of Subsequent Auditor

Will be appointed for 5 years in AGM
Within 15 days from the date of appointment in Annual General Meeting

Filing of form ADT-1

Within 15 days from the date of appointment of Auditor

Filing of Financial Statements i.e. form AOC-4

Within 30 days of Annual General Meeting

Filing of Annual Return i.e form MGT-7

Within 60 days of Annual General Meeting

Statutory Audit of Accounts

By a Chartered Accountant

Filing of Income Tax Return of Company

30th of September every year

Maintenance of Statutory Registers, Minutes books and records

All the Companies are advised to maintain few statutory registers in the prescribed format such as register of members, register of charges, register of directors and KMP, register of loan and guaratee etc.
Minutes of Board meeting and general meeting, Attendance Register, Books of Accounts etc. are to be maintained

Proof of Circulation of Notice, Draft and signed Minutes

Should be maintained for a period of 3 years from the date of meeting

Directors KYC*

30th of September

E-Form MSME-1

Every Company having outstanding payments dues to micro and small enterprises and in case the payment of the same is pending beyond 45 days, then the Company has to furnish details as per the following timeline:

For April to September by 31st October
For October to March by 30th April

E-Form DPT-3*

All the Company having any outstanding loan/amounts as on 31st March of every finacial year has to furnish details and bifurcation of such outstanding amount irrespective of the fact whether such amount irrespective of the fact whether such amount is falling under the definition of deposit or not by 30th June

The Compliance due dates provided above in respect of form DPT-3 and Directors KYC are based on the last year due dates and notifications/circular issued by Hon’ble Ministry of Corporate Affairs.

Rest some modifications in dates can be there in upcoming future on the discretion of MCA

Conclusion

Company is a popular option to start a business in India by startups, serious businessman and persons seeking non-debt funding from outside. A company is incorporated under the Companies Act, 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. Hence, providing key advantages like the ability to contract in its own name, and safeguard personal assets of the owners from business liabilities.

Annual Compliance Checklist for Startups

The below checklist is applicable for private limited companies, particularly Small Companies with paid up capital of upto ₹50Lakh or having annual turnover in last year below ₹2Cr. There may be event-based compliances for the Small Company apart from this. Other Statutory compliances of such private limited companies revolve around periodic filing of tax and other returns, maintenance of books under Income-tax Act and other statutes as applicable etc. The compliance requirement differs from a case to case basis depending upon nature of the business, product or service provided, the volume of turnover etc.

The compliances can be categorized as below:

Registrar related Compliance
Non-Registrar compliance

Registrar related Compliance

S.No	Compliance	Particulars	Time Frame
1	Appointment of Auditor	* First Statutory Auditor has to be appointed within 30 days of incorporation in first board meeting	Form ADT-1 is filed for a 5-year appointment. After that every year in AGM, Shareholder ratify the Auditor but there is no need to file ADT-1.
	(E-form ADT-1)	* Subsequent auditors will be appointed for 5 years in AGM.
2	Holding Board Meeting	First meeting within 30 days of incorporation Minimum 2 meetings, one in each half calendar year	Minimum gap of 90 days is required between 2 meetings (ignore if more than 2 meetings held during the year)
3	Holding Annual General Meeting(AGM)	One AGM	Maximum gap of 15 months between 2 AGMs
	E- Forms Filing Requirements	E-form: MGT-7 File Annual Return within 60 days of holding of AGM for the period 1st April to 31st March.
		E-form: AOC-4 File Financial Statement: i.e Balance Sheet along with Statement of Profit and Loss Account and Directors’ Report
		Form MBP- 1 Every Director of the Company in First Meeting of the Board of Director in each Financial Year needs to disclose his interest in other entities by filing the form	Fresh MBP-1 needs to be filed, whenever there is change in his interest from the earlier given MBP-1
		Form DIR – 8 Every Director of the Company in each Financial Year has to file with the Company disclosure of non-disqualification
4	Directors’ Report	Directors’ Report is to be filed covering all the information required for Small Company under Section 134.	It should be signed by the “Chairperson” authorized by the Board, where he is not so authorized by at least 2 Directors.
5	Statutory registers and books of accounts	1. Statutory Registers 2. Minutes Book Board Meeting Minutes Book General Meeting Minutes Book (i.e. AGM, EGM, Postal Ballot, Creditors Meetings, Debenture holders Meetings) 3. Books of Accounts/Financial Statements(section 44aa) 4. Register of Directors Attendance at Board/Committee Meetings
6	Circulation of Financial Statement & other relevant Docs	Company will send to the members of the Company approved Financial Statement, Directors’ Report and Auditor's’ Report at least 21 clear days before the Annual General Meeting.

Non-Registrar compliance

Payment of periodic dues (GST Liability, TDS & TCS payment)

Monthly/Quarterly GST Returns
Quarterly TDS Returns
Assessment of advance tax liability and payment of advance tax periodically
Filing of Income Tax Returns (Tax will be payable at a flat rate of 30% plus Education Cess)
Filing of Tax Audit Report
Regulatory Assessment of business under different acts of law (Eg. Environment and Protection Act, Money Laundering Act, Competition Act, Factory Act etc.)

Frequently Asked Questions

1. What are the minimum requirements to register a Private Limited Company?
- Minimum 2 Directors shall be appointed, out of which one must be a resident of India.
- Minimum 2 shareholders are required for this registration. Here, an individual may become shareholder and Director at the same time.
- A place of business in India must be provided as a registered office address.
2. What are the minimum requirements towards Capital?
- Authorised Capital (Limit up to which company can allot shares) is prescribed as Minimum Rupees One Lakh, however, since the Stamp duty and fee for Authorised Capital up to Ten Lakhs is same, we recommend it to be kept at Ten Lakhs only
- There is no minimum paid-up capital requirement, however, atleast one share subscription each subscriber is a must, we recommend the paid up capital to be kept as One Lakh since initial expenditure and Bank account opening needs that kind of money.
3. What is the requirement of DSC (Digital Signature Certificate)?
- DSC is provided in the form of token issued by Certified Authorities and is a substitute of Physical Signature and enable the owner to sign documents digitally
- Company incorporation is a complete online process and all the forms required to be filed for incorporation of company are required to be signed digitally with the help of DSC of the Directors
- Company Sarthi helps its clients in the issuance of DSC
4. What is the requirement of Documents for DSC issuance?
- Self-attested Documents and Details required are:
- On submission of above documents with the DSC Authority partner, applicant will receive the OTP on the given Mobile and e-Mail ID and thereafter applicant has to complete Mobile and Video verification.
5. What is the eligibility to become a Director in Company?
- Any natural person above the age of 18 years can become the director in the company after procuring Director Identification Number (DIN).
- There are no specific criteria provided in terms of citizenship or residency, a foreign national can also become a director.
6. What is Director Identification Number (DIN)?
- DIN is a unique number assigned by the Ministry of Corporate Affairs to Individuals on whose name the application is made, allowing that individual to become a Director in a Company or Designated Partner in an LLP.
- DIN is allowed only once in lifetime and can be used to become a Director in any number of company as per eligibility criteria.
- The application of DIN Allotment is now merged with the application for the formation of a company subject to a limit of maximum 3 DIN.
7. What is the requirement of Documents for DIN issuance?
- Self-attested Documents and Details required are:
- Proof of Residence of Applicant (Any one not older than 2 months having same address as that in the Proof of Identity):
8. How to reserve the name of the Company?
- Applicant has to give few choices of the name which can be checked at the Company Sarthi for the availability.
- On the availability of atleast one name, Company Sarthi inform you of the same and ask you to provide two options of that name and the priority preference.
- Company Sarthi also seeks from you the main objects of the company and State in which Registered office will be situated.
- Although Company Sarthi follows a rigorous process of checking availability of Name, the registrar may ask to re-submit application with a different name if names applied do not fall under the criteria of uniqueness, relevancy or do not fulfill other requirements.

9. Does any subscriber have to be physically present for completing the process of Incorporation of the Company?
- No, none of the promoters are required to be physically present for completing the process of Incorporation of the Company.
- All the forms are filed on the web portal and are digitally signed.
- Also, the required documents can be sent through e-mail or uploaded on our portal for filing.
10. What documents are required for registered office of Company?
- Business address Proof (Any one not older than 2 Months):
- No Objection Certificate to be obtained from the owner(s) of registered office.
- Rent Agreement of the registered office should be provided if property is on rent.
11. How can Foreign Companies establish a place of business in India?
Any foreign company can establish its place of business in India by filing eForm FC-1 (Information to be filed by foreign company).

Note: The eForm needs to be digitally signed by authorized representative of the foreign company. There is no need to apply and obtain DIN for Directors of a foreign company. However, it is mandatory to register the DSC of the authorized representative of the foreign company via associate DSC service available at MCA portal.
12. What are the Annual Compliance requirements to be fulfilled by a Private Company?
During every financial year, the company must hold one Annual General Meeting (AGM) and at least 4 board meetings (one in each quarter). Further, the accounts and financial statements must be audited by an independent auditor. Subsequently, it shall file form AOC – 4 and MGT – 7 as part of Annual Compliance within given time.
13. What are the statutory requirements to be fulfilled once Private Company is registered?
Once, the company is registered, it should follow below-mentioned requirements on priority:
- The opening of the company’s current account within 30 days after receiving the PAN card.
- Appointment of a Statutory Auditor
- Depositing paid-up capital as mentioned while registration
- Issue and allotment of shares
14. Can NRIs/Foreigners hold shares in Private Limited Company?
Yes, NRIs or foreigners can hold shares subject to FDI guidelines. However, a foreign participation above 50% will place the company under the category of Foreign Company.
15. What are the applicable tax rates for a domestic company?

	Tax Rate	Effective Tax rate
Domestic Company:	(Base Rate)	(Base rate + surcharge + CESS)
Not availing any exemptions or incentives	22%	25.17%
Manufacturing companies incorporated after 01st October,2019 and not availing any incentives or exemptions	15%	17.16%
Availing any exemptions or incentives- turnover up to 400/- crore during FY 2017-18	25%	25%+ surcharge +4% CESS(*Surcharge varies as per the income tax slab)
In any other case	30%	30%+ surcharge +4% CESS(*Surcharge varies as per the income tax slab)