Private Limited Company Registration

In India, company registration can be completed online through legalstartup. Private Limited Company is the most common type of legal entity preferred by millions of Indian entrepreneurs and popular startups like Flipkart, PhonePe and Swiggy. A private limited company in less than 10 days only Rs. Can be registered online at a very affordable cost of Rs. 7899.

What is a Private Limited Company?

A Private Limited Company (PLC) is one of the most common types of legal entities in India. Private limited companies are governed by the Companies Act, 2013 and require a minimum of 2 directors and 2 shareholders, of which one director is an Indian resident and an Indian citizen.

Following are the requirements to register a company in India:

  • 2 Directors – 1 person should be an Indian citizen and resident of India
  • 2 Shareholders – Directors can be shareholders
  • Registered Office in India

100% Foreign Direct Ownership (FDI) is permitted in most sectors in India and there is no restriction on foreign shareholding of a private limited company. Therefore, most foreign subsidiaries are incorporated in India as a private limited company.

Documents required for company registration

The proposed directors of a private limited company have to submit the following documents as proof of identity to get the company registered:

Indian Nationals: PAN card mandatory

Foreign Nationals: Passport is mandatory

In addition to the above document, the Directors also have to submit one of the following documents that consist with the address of the Director

Indian Nationals: Passport / Driver’s License / Election ID / Ration Card / Aadhar ID

Foreign Nationals: Driving License / Statement of Bank / Residence Card

Lastly, as proof of residence, the prospective directors will have to produce one of the following documents. This document must be generated within the last two months:

Indian Citizen: Bank Statement/Electricity Bill/Phone Bill

Foreign Nationals: Bank Statement/Electricity Bill/Phone Bill

If any of the shareholders of the company is a company based in India or abroad, the following documents have to be submitted:

  • Board resolution authorizing investment in the company
  • Company’s Certificate of Incorporation
  • Company address proof

Capital Required to Start a Company

A company can be started in India with very little capital. There is no fixed amount and the shareholders of the company being incorporated can determine the amount of capital they wish to contribute. While establishing the capital structure of the company, some of the following concepts should be kept in mind:

Share of Face Value: The face value of a share is the price of per share with which the company is incorporated. Normally, the face value of the share is Rs. 1 or Rs. 10 or Rs. 100 or Rs. 1000 or Rs. 10,000.

Authorized Capital: Authorized capital is the total value of shares that a company can issue to shareholders. Usually, All the companies are incorporated with an authorized capital of Rs. 1 lakh or Rs. 10 lakhs. If more authorized capital is required, the company has to pay an additional fee to the Ministry of Corporate Affairs. The authorized capital of a company can be increased at any time after its incorporation.

Paid-up Capital: The paid-up capital of a company is the number of shares issued to the shareholders for which they have paid or deposited with the company. The paid-up capital of a company cannot exceed the authorized share capital of the company.

Company Registration Process

Following are the steps while registering a company in India:

Step 1: Run Name Approval

To reserve a company name an application for approval of a company name is first submitted to the Ministry of Corporate Affairs. In the application of name approval, 1 or 2 names may be submitted with the objectives of business. If the approval of a name is rejected, 1 or 2 more names may be resubmitted. Normally, MCA accepts all the approval of name applications within 5 working days.

Step 2: Digital Signature for Directors

In India, the Ministry of Corporate Affairs does not grant wet signatures. All signatures for filing with the MCA must be completed with a digital signature issued by a Certifying Authority in India. Hence, digital signature is mandatorily required for the directors before incorporation.

The digital signature for the directors will be obtained through a Certifying Authority authorized by legalstartup. In order to obtain the digital signature, the directors need to submit a copy of their identity proof and undergo a video KYC process. If the administrator is a foreign national, then the passport and other documents which are submitted must be apostilled by the local embassy.

Step 3: Submit the Incorporation Application

Once the digital signature is achieved, The application of incorporation can be filed in SPICE form to the MCA along with all relevant enclosures. As well as the incorporation application, the Memorandum of Association (MOA) and Articles of Association (AOA) of the company are filed. If the MCA finds the incorporation application complete and acceptable, a Certificate of Incorporation is given along with the PAN of the company. The MCA generally accepts all incorporation applications in less than 5 working days.

Registered Office of the Company

All companies that are registered in India are required to manage a registered office in India. The registered office shall have a board with the name of the company and a place where notices or communications, if any, may be served. Therefore, the registered office of a company cannot be bare land or bounds under construction.

After incorporation, the registered office of the company can be changed if required. If the registered office is alternated within the same registrar or same city company, the process can be freely completed. If the registered office of a company is changed from one state to another, the process will be longer and more cumbersome.

GST Registration after Company Registration

At the time of the company registration process, directors can operate to achieve GST registration with incorporation. However, it is not essential for a company to be registered under GST, unless a certain turnover threshold is crossed.

Bank Account for Private Limited Company

After company registration, within 180 days a bank current account should be opened in the name of the company and the subscription amount has to be deposited. If the above steps are not completed, the occupation certificate will not be issued and a penalty will be applicable.

Following are the documents required for opening a bank account for a private limited company:

  • Company’s Certificate of Incorporation
  • Director KYC Documents
  • Board resolution authorizing directors to open bank account
  • Company address proof

At Legalstartup, we work with the different banks to help our clients open present accounts for their companies in a logical manner.

Advantages of Private Limited Company

The following are the extensive advantages of incorporating a Private Limited Company in India up to other types of entity.

Separate Legal Entity

A company is the pair of both the legal entity and a juristic person. Therefore, a company has wide legal rights such as acquiring assets, taking loans, Hiring people, etc. As a company is a separate legal entity, the members (shareholders or directors) of the company are not personally liable for the liability of the company.

Limited Liability

A Private Limited Company is an independent legal entity with limited liability provisions. Hence, the shareholders are not liable for the loss of the company – to the extent of the amount invested by them in the company as share capital.

Uninterrupted Existence

A company has ‘perpetual succession’, Which means it will carry on to stay until it is legally dissolved. Because a company is a independent legal entity, it is straightforward by the death or other departure of any of its members, and it continues to endure disregarding of membership changes

Boosting Fund

A Private Limited Company has several options for raising funds. A company can boost the funds from shareholders, investors, Angels, Private Equity Funds, Venture Capital Funds, Foreign Funds, NBFCs, Banks and many other financial institutions. Only a company can boost debt and equity funds from investors.

Disadvantages of Private Limited Company

As a company has many types of advantages but registering a company may not be ideal for all entrepreneurs due to the following reasons:


A company has to mandatorily maintain various compliances irrespective of business turnover or activity. Therefore, the operation of a company involves minimal recurring costs each year.

Documents that are Required for Private Limited Company

  • PAN Card

PAN is mandatory for Indian Directors.

  • Passport (Foreign Nationals Only)

Passport is mandatory for Foreign Directors or Shareholders.

  • Aadhaar Card

Aadhaar is mandatory for Indian Directors.

  • Foreign Government – Address Proof

Any document issued by a Foreign Government having a photo and address of the Director or Shareholder.

  • Bank Statement

Latest bank statement of the Directors and Shareholders.

  • Latest Electricity Bill

Latest electricity bill for the registered office premises.

  • 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 Authorising Investment

If the proposed shareholder is another company or legal entity.

  • Investing Company Address Proof

If the proposed shareholder is another company or legal entity.

  • Passport Size Photo

Passport size photo of the Directors and Individual Shareholders.

  • Recent Utility Bill

Business Place


The minimum required capital for initialization of Private Limited Company is 1 lakh rupees.

Yes, it is possible to use a residential property as a registered office of a Private Limited Company.

The selected name should be unique and different which will help to complete the registration process with ease.

Yes, foreign parent or holding Companies, including USA parent companies, can incorporate a subsidiary, as a 100% owned Private Limited Company in India subject to Foreign Direct Investment (FDI) Guidelines.

Any individual seeking for the directorship of the company needs to apply for Director Identification Number.

The director holds the responsibility to manage the company in a most efficient manner. As well as he should have the leadership quality as well as he should know about his responsibilities.

The registered office of the company with the same state can be done by just giving the notice within 30 days. Yes, the registered office of the company can be shifted from one state to another by following the specified procedure.

Yes, One person company can be converted into Private Limited Company. Do, I need to be physically present during the process? There is no necessity for an individual to be present at the location while registration because the entire procedure is done online.

Yes, a salaried person can become the director in private limited.

Yes, as per the companies act on anyone or any individual can become the director of the company.

Private limited company is owned by an individual or the members of the company.

As per the Companies Act 2013, the companies which come under this term needs to register themselves as a Private Limited Company.

As a director you may be personally liable for the losses and personal debts.

A Directors Loan is when you take money from your Company that isnt a salary, dividend or expense repayment and youve taken more than youve put in.

No, a Private Limited Company cannot give loans to anyone as per the sub- section 1 of section 185.

Yes, a Private limited company can accept loan from NRI.

The annual turnover should be above 20 lakh rupees.

A India limited company is a limited company incorporated under Companies Act 2013.

MOA and AOA are charter documents of the company. It defines the business objectives and rules & regulations of the company. It is drafted by our professionals and delivers to you along with Certificate of incorporation

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