Introduction

Private Limited Company (PLC) is the most popular form of business entity in India. It offers several advantages, such as limited liability, perpetual succession, separate legal entity, and ease of raising capital. In this article, we will discuss the steps for private limited company incorporation in India, including the types and keywords involved.

Steps for Private Limited Company Incorporation in India

1. Obtain Digital Signature Certificate (DSC)

The first step in private limited company incorporation in India is to obtain a Digital Signature Certificate (DSC) for the proposed Directors of the company. A DSC is a secure digital key that is issued by a certifying authority and is used to sign electronic documents. The DSC is required for online filing of forms with the Ministry of Corporate Affairs (MCA) and for signing the Memorandum of Association (MOA) and Articles of Association (AOA).

2. Obtain Director Identification Number (DIN)

The next step is to obtain a Director Identification Number (DIN) for the proposed Directors of the company. A DIN is a unique identification number that is assigned to every Director by the MCA. It is required for appointment as a Director of a company in India.

3. Name Approval

The third step is to obtain name approval from the Registrar of Companies (ROC). The proposed name of the company must be unique and not similar to the name of any existing company. The name should also comply with the guidelines provided by the MCA. The application for name approval can be filed online on the MCA website.

4. Drafting of MOA and AOA

The fourth step is the drafting of the Memorandum of Association (MOA) and Articles of Association (AOA) of the company. The MOA and AOA are legal documents that define the objectives and rules of the company. The MOA contains the main objects of the company, while the AOA contains the rules and regulations governing the internal management of the company. The MOA and AOA must be signed by the Directors and shareholders of the company.

5. Filing of Incorporation Documents

The fifth step is the filing of the incorporation documents with the ROC. The following documents must be filed:

• Form SPICe (Simplified Proforma for Incorporating Company Electronically): This form is used for the incorporation of a company and contains the details of the proposed Directors and shareholders, registered office address, and authorized capital of the company.
• MOA and AOA: The MOA and AOA must be filed along with Form SPICe.
• Affidavit and Declaration: The proposed Directors and shareholders must file an affidavit and declaration stating that they are not disqualified to become Directors or shareholders of the company.
• Address Proof: The registered office address of the company must be verified by submitting a copy of the electricity bill, property tax receipt, or lease agreement.

6. Payment of Fees

The sixth step is the payment of fees for the incorporation of the company. The fees can be paid online on the MCA website using a credit card, debit card, or net banking.

7. Certificate of Incorporation

The final step is the issuance of the Certificate of Incorporation by the ROC. The Certificate of Incorporation is a legal document that certifies that the company has been incorporated and is registered under the Companies Act, 2013. The Certificate of Incorporation contains the Corporate Identity Number (CIN) of the company, which is a unique identification number assigned by the ROC.

Types of Private Limited Company Incorporation

1. Incorporation with Limited Liability Partnership (LLP) as a partner

In this type of incorporation, a private limited company can be incorporated with an LLP as a partner. This allows the private limited company to benefit from the limited liability protection offered by an LLP, while also enjoying the benefits of a private limited company, such as separate legal entity, perpetual succession, and ease of raising capital. This type of incorporation is especially useful for startups and small businesses that want to limit their liability while also maintaining the flexibility and ease of operation offered by a private limited company.

2. One Person Company (OPC) incorporation

In this type of incorporation, a private limited company can be formed with a single person as the Director and shareholder. This allows an individual to enjoy the benefits of limited liability protection while also maintaining complete control over the company. The OPC is a good option for entrepreneurs and freelancers who want to start a business on their own without the need for partners.

3. Joint Venture (JV) incorporation

In this type of incorporation, two or more companies come together to form a joint venture company. The JV can be formed for a specific project or for a specific period of time. The JV allows the companies to pool their resources and expertise to achieve a common goal. The JV can also help companies to enter into new markets or to expand their existing operations.

4. Subsidiary company incorporation

In this type of incorporation, a private limited company can be formed as a subsidiary of another company. The subsidiary company is a separate legal entity and is owned by the parent company. The subsidiary company can be used to enter into new markets or to diversify the business of the parent company.

Keywords involved in Private Limited Company Incorporation in India

1. Digital Signature Certificate (DSC): A secure digital key that is used to sign electronic documents.
2. Director Identification Number (DIN): A unique identification number that is assigned to every Director by the MCA.
3. Registrar of Companies (ROC): The authority responsible for the registration and regulation of companies in India.
4. Memorandum of Association (MOA): A legal document that defines the objectives and main objects of the company.
5. Articles of Association (AOA): A legal document that contains the rules and regulations governing the internal management of the company.
6. Corporate Identity Number (CIN): A unique identification number assigned by the ROC to every company registered under the Companies Act, 2013.

Conclusion

Incorporation of a Private Limited Company in India involves several steps and procedures that must be followed to ensure compliance with the law and regulations. The process involves obtaining a Digital Signature Certificate, Director Identification Number, and name approval from the Registrar of Companies. The Memorandum of Association and Articles of Association must be drafted and filed along with the incorporation documents. The payment of fees and the issuance of the Certificate of Incorporation complete the process. There are different types of Private Limited Company Incorporation in India, such as with Limited Liability Partnership (LLP) as a partner, One Person Company (OPC) incorporation, Joint Venture (JV) incorporation, and Subsidiary company incorporation. It is important to choose the right type of incorporation based on the business objectives and requirements.