The registration of a Private Limited Company (PLC) is a crucial measure for entrepreneurs
seeking to formalize their business structure in India. A PLC provides its owners with limited
liability protection, managerial flexibility, and market credibility. This is a comprehensive guide
that will assist you with registering a Private Limited Company in India, including crucial
information to take into account.
Steps to Register a Private Limited Company in India
Step 1: Use RUN to name your reservation
The next action is to use the MCA portal’s RUN (Reserve Unique Name) service to reserve a
distinctive name for your business. The following advice can help you choose a name:
● Make sure the name doesn’t sound the same or resemble an already-existing business
name.
● Verify trademark availability to prevent concerns about infringement.
● The company’s name ought to correspond with its business endeavours.
● Up to two names may be submitted for approval. The name will be held for 20 days after
approval.
Step 2: Acquire a Certificate of Digital Signature (DSC)
Obtaining a Digital Signature Certificate (DSC) for each proposed director and shareholder of
the business is the first step. To sign online electronic documents, you must have the DSC. It is
available from accredited organizations including nCode, Sify, and eMudhra. Usually, you will
have to turn in:
● Identity Verification (PAN Card, Adhaar Card, etc.)
● Proof of address (passport, utility bills, etc.)
● Passport-sized photographs
Step 3: Articles of Association and Memorandum Drafting
Draft the articles of association (AOA) and the memorandum of association (MOA). These are
essential documents outlining the operating guidelines and constitution of the business. You have
two options for creating these documents: you can do it yourself or hire a corporate secretary or
legal expert to help
Step 4: Preparation and Filing of Application Form
Obtain proof of identification and address for directors and shareholders, as well as proof of the
registered office address, to form a Private Limited Company. Get Director Identification
Numbers (DINs) if necessary, then apply for Digital Signature Certificates (DSC). Fill out the
application (SPICe+ in India, for example) and upload it to the government portal along with the
required paperwork. Once the payments have been paid, submit the form online for approval and
review.
Step 5: Filing of Application Form
Filling out the application for a Private Limited Company entails filling out the appropriate form
(SPICe+ in India, for example) and uploading it to the government portal with the required
paperwork, which includes the Memorandum and Articles of Association, proof of the registered
office, and identity and address verification. Once you have your Director Identification
Numbers (DIN) and Digital Signature Certificates (DSC), if applicable, fill out the online
application, pay the applicable fees, and then wait for the Registrar of Companies to approve it
Step 6: Issuance of Certificate of Incorporation
A Certificate of Incorporation (COI) will be issued by the Registrar of Companies (RoC)
following the successful submission and verification of all forms and documentation. This
certificate attests to your company’s legal existence. It consists of:
● The number for Corporate Identity (CIN)
● Date of the company’s incorporation
● PAN and TAN of the company
Step 7: Creating an Account with a Bank
You can create a bank account under the name of the firm once you have the Certificate of
Incorporation. The following will need to be provided by you:
● AOA and MOA
● Certificate of Incorporation
● Board resolution authorizing account opening
● Verification of the signatures’ identities
Benefits of registering a private limited company
Limited Liability Protection: Personal assets of shareholders are shielded from obligations and
liabilities of the company.
Enhanced Credibility: Promotes trust with partners, investors, and clients, which helps with
business development and funding.
Perpetual Succession: Guarantees company continuity if management or ownership changes.
Tax Benefits: Provides a range of tax advantages as well as chances for effective tax planning.
Reinvestment and Retention of Profits: Allows for the retention and reinvestment of income to
support the expansion of the company.
Adaptable Management Structure: A flexible management structure may change management
as circumstances require, with defined roles and duties.
Easy Share Transfer: This makes it easier to transfer shares, which promotes growth and offers
founders and investors exit options
Additional Considerations
Post-Incorporation Compliances:
● The auditor will be appointed within 30 days of the incorporation.
● Share certificates will be issued within 60 days following incorporation.
● First Board Meeting: No later than thirty days after formation.
● Compiling yearly reports and financial statements is known as annual compliance
Costs Involved:
● The cost per individual for DSC and DIN is between ₹1,000 and ₹2,000.
● Reservation of Name: ₹1,000
● ROC fees and stamp duty vary according to state and permitted capital
● Expert Fees: ₹5,000–₹15,000 (extra, if you choose to work with an expert)
Time:
Depending on when the paperwork is timely submitted and how long it takes the government to
process it, the full process usually takes 10 to 15 working days.
Conclusion
In India, forming a Private Limited Company is a methodical procedure that guarantees the legal
recognition of your enterprise. PLCs are a popular option for entrepreneurs due to their benefits,
which include faster access to finance and limited liability protection. You can create a Private
Limited Company and start your entrepreneurial adventure by following these steps and being
aware of the compliance requirements
