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Discover the key features of a Private Limited Company. In India, this business structure sits between a partnership firm and a public company. Learn about its registration process, minimum requirements, and the roles of directors and shareholders. Understand why a Private Limited Company is a popular choice for many businesses.
5 May 2024
Afinthrive Advisory
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Key Steps to Make Your Decision Easy
Select a unique and memorable name for your company that aligns with your brand vision and complies with legal requirements.
Choose Your Company Name
Prepare key documents such as the Memorandum of Association (MOA) and Articles of Association (AOA), outlining the company’s purpose, operations, and regulations.
Draft Your Essential Documents
Every director needs to obtain a DIN for their identification. This is essential for any filings with the Registrar of Companies (ROC).
Obtain Director Identification Number (DIN)
At least one director needs a DSC to sign documents digitally. It’s crucial for submitting electronic forms and filings.
Get Your Digital Signature Certificate (DSC)
Fill out the SPICe (Simplified Proforma for Incorporating Company Electronically) form, providing details about the company and its directors for online submission.
Complete the Incorporation Application
Submit your incorporation documents, including the MOA, AOA, and director declarations, to the ROC along with the applicable fees.
File with the Registrar of Companies (ROC)
Once approved by the ROC, you'll receive the Certificate of Incorporation, marking your company as officially registered and ready to do business.
Receive Your Certificate of Incorporation
Ensure that your company stays on top of regulatory requirements such as annual meetings, financial filings, and tax submissions to keep things running smoothly.
Stay Compliant with Legal Requirements
There are Some complaince to be maintained by PLC
This registration is mandatory for Private Limited Companies engaging in taxable supplies of goods or services within 30 days of incorporation. Once registered, the company must collect GST on its sales, file regular tax returns, and comply with GST regulations, helping to ensure legal compliance and seamless business operations.
filing GST returns involves submitting periodic reports to the tax authorities detailing its sales, purchases, and tax liabilities. These returns typically include:
Accounting for a Private Limited Company is mandatory and involves several key steps and considerations to accurately record financial transactions, ensure compliance with regulatory requirements, and provide stakeholders with meaningful financial information.
A statutory audit of a Private Limited Company is a mandatory examination of its financial records, conducted by an independent auditor to ensure compliance with statutory requirements and financial reporting standards irrespective of it turnover. Thus, the Board of Directors of a Private Limited Company are required by law to appoint an Auditor within 30 days of incorporation and thereafter conduct an audit of its financial statements each financial year.
The requirement for an income tax audit of a Private Limited Company typically arises when the company’s annual turnover or profits exceed certain thresholds specified by tax authorities.Turnover Threshold: If the company’s total turnover from business exceeds INR 1 crore (for financial year 2021-22, subject to change as per amendments).Profit Threshold: If the company’s net profit before tax exceeds 8% of its turnover or INR 6 crores, whichever is higher.
Filing with the Registrar of Companies (ROC) is a mandatory compliance requirement for Private Limited Companies.Forms like AOC-04, MGT 7/7A are required to be submitted compulsory by the company along with other forms which are filed on meeting certain criteria.Ensuring timely and accurate filing with the ROC is essential for Private Limited Companies to maintain compliance with regulatory requirements and avoid any penalties or legal liabilities.
Trademark registration is a crucial step for protecting a company’s brand identity and intellectual property. While it’s not legally mandatory to register a trademark for a Private Limited Company, doing so offers significant advantages and protections for the company’s brand identity and intellectual property. Registering a Private Limited Company with a name does not provide complete protection to the name or brand name. Ultimate protection for a business name is secured only by Trademark Registration of same. By trademark registration, you may get the ownership of your Pvt Ltd Co. name or brand name or logo etc.
If a Private Limited Company wishes to engage in import or export activities, it is mandatory to obtain an IEC code. The code serves as a mandatory requirement for customs clearance for goods entering or leaving the country.
The company must maintain statutory registers such as the Register of Members (shareholders), Register of Directors, Register of Charges, etc., and keep them updated.
Here is the check list of documents required.
Get Answers to your most asked questions.
The process for dissolving a Private Limited Company typically involves passing a special resolution, settling outstanding liabilities, and filing dissolution documents with the Registrar of Companies.
The registration process can vary depending on factors such as the jurisdiction and completeness of documentation. Generally, it can take 10-12 working days
A Private Limited Company must have a minimum of two members (shareholders) and can have a maximum of 200 members.
There is no fixed minimum capital requirement for a Private Limited Company in many jurisdictions. The capital can be as low as one rupee or its equivalent.
Ongoing compliance requirements include holding annual general meetings, maintaining statutory registers, filing annual returns, complying with tax laws, and adhering to other regulatory requirements.
Yes, a Private Limited Company can be converted into another business structure such as a Public Limited Company, Limited Liability Partnership (LLP), or sole proprietorship, subject to compliance with legal procedures and regulatory requirements.
Yes, a Foreign National or an NRI can become a Director of a Private Limited Company in India after obtaining Director Identification Number (DIN). However, it may be noted that at least one Director on the Board of Directors must be a Resident India.
