Private Limited Company

Capital Required Starting a Company.

In India, a business can be started with very little funding. The capital contributions made by the shareholders of the newly formed company are entirely up to them; there is no set amount. Some of the following ideas should be considered when establishing the capital structure of the business:

Share of Face Value: The cost per share at which the firm is incorporated is known as a share's face value. Sometimes, a share's face value is 1, 10, 100, 1,000, or 10,000 rupees.

Authorized Capital:The entire number of shares that a corporation can issue to shareholders is known as authorized capital. Typically, all firms have an authorized capital of Rs. 1 lakh or Rs. 10 lakhs when they are incorporated. The corporation must pay an additional fee to the Ministry of Corporate Affairs if more authorized capital is needed. The authorized capital of a company may be increased at any time after incorporation.

Paid-up Capital:The quantity of shares distributed to shareholders in exchange for money they have paid or deposited with a corporation is known as paid-up capital. A company's authorized share capital cannot be greater than its paid-up capital.

Company Registration Process

Following steps while registering a company in India:

Step 1: Run Name Approval

A request for approval of the company name must first be made to the Ministry of Corporate Affairs in order to reserve a name. One or two names may be included in the application for name approval together with the business's goals. One or two more names may be submitted if the approval of a name is rejected.. Normally, MCA accepts all the approval of name applications within 5 working days.

Step 2: Digital Signature for Directors

Wet signatures are banned by the Ministry of Corporate Affairs in India. A digital signature issued by an Indian Certifying Authority must be used on all signatures submitted for filing with the MCA. Therefore, before incorporation, the directors must have a digital signature.

The Certifying Authority chosen by legal startup will provide the digital signature for the directors. The directors must submit a copy of their identity evidence and go through a video KYC process in order to receive the digital signature. If the administrator is a foreign national, the local embassy must apostle the administrator's passport and any other supplied documentation.

Step 3: Submit the Incorporation Application

Once the digital signature has been obtained, the application for incorporation can be submitted to the MCA in SPICE form along with any necessary attachments. The company's Memorandum of Association (MOA) and Articles of Association (AOA) are filed along with the application for incorporation. A Certificate of Incorporation and the company's PAN are provided if the MCA accepts the incorporation application as complete and acceptable.. The MCA generally accepts all incorporation applications in less than 5 working days.

Registered Office of the Company

Every company that registers in India must maintain a registered office there. The company's name and a location where notices or communications, if any, may be delivered are all displayed on a board at the registered office. Therefore, raw ground or limits that are being built upon cannot serve as a company's registered office.

The registration office of the company may be changed if necessary after incorporation. The procedure can be finished without restriction if the registered office is changed within the same registrar or same city company. The procedure is longer and more difficult when a company's registered office is moved from one state to another.

GST Registration after Company Registration

Directors can work to secure GST registration as well as incorporation throughout the company registration procedure. However, unless a specific earnings criterion is exceeded, a corporation is not need to be registered under GST.

Bank Account for Private Limited Company

Following company development, a bank current account in the firm's name must be opened within 180 days, and the subscription money must be deposited there. The occupation certificate won't be issued if these steps are not followed, and there will be penalties.

The following papers are necessary for a private limited business to obtain a bank account:

• Director KYC documents
• The company's certificate of incorporation
• A board resolution allowing directors to open a bank account
• Proof of a company address

At Legalstartup, we collaborate with many banks to assist our clients with opening current accounts for their businesses in a systematic manner.

Advantages of Private Limited Company

Let’s have a look of at the benefits of Private Limited Company Registration in India.

Separate Legal Entity

A company is a pair of a juristic person and a legal entity. As a result, a firm has many legal rights, including its capacity to buy property, raise money, and employ people.. A private limited company is a legal entity in its own rights, which allows the business owner to keep his assets separate from the business. That means that the business owners aren’t subject to any personal liability

Limited Liability

A Private Limited Company is a stand-alone legal entity with restrictions on liability. Therefore, to the extent that they invested in the company as share capital, the shareholders are only responsible for the loss of the company.

Uninterrupted Existence

A company is straightforward by the death or other departure of any of its members because it is an independent legal entity, and it keeps running no matter what membership changes

Boosting Fund

There are various ways for a Private Limited Company to raise money. Shareholders, investors, angel investors, private equity funds, venture capital funds, foreign funds, NBFCs, banks, and many other financial institutions can help a company increase it’s funding. Investor capital for debt and equity can only be increased by a corporation.

Disadvantage of Private Limited Company

As a company provides many benefits, not all business owners may find it best to register one for the following reasons:

Compliance

Regardless of economic activity or turnover, a corporation is required to maintain a number of compliances. As a result, there aren't many annual recurring expenses associated with running a business.

Documents that is required for Private Limited Company

• PAN Card

PAN is mandatory for Indian Directors.

• Passport (Foreign Nationals Only)

For foreign directors or shareholders, a passport is required.

• Aadhaar Card

Aadhaar is mandatory for Indian Directors.

• Foreign Government – Address Proof

any document issued by a foreign government that includes the name, address, and photo of the director or shareholder.

• Bank Statement

Latest bank details of directors and shareholders.

• Latest Electricity Bill

for the registered office's premises, the most recent electricity bill.

• Latest Telephone Bill

Latest telephone bill for the registered office premises. Electricity bill preferred.

• Latest Mobile Bill

Latest mobile bill for the registered office premises. Electricity bill preferred.

• Board Resolution Authorizing Investment

if the proposed shareholder is another legal entity or companied.

• Investing Company Address Proof

If the proposed shareholder is another legal entity or company.

• Passport Size Photo

Passport size photo of the Individual Shareholders and Directors.

• Recent Utility Bill

Business Place