Start your Private Limited Company Registration in India
Share holders/Directors Details
- Pan card
- Aadhar card
- Passport or Voter ID or Valid Driving License
- Recent Bank statements (not older than 1 month)
- Mobile number & email id
- passport size photo.
Company Details
- Electricity bill or Telephone bill or gas bill of your office address (not older than 1 month)
- Property owner – Name & Address (to draft rental agreement)
- Two Proposed company names (To apply for name reservation).
Deliverables
- Digital signature for 2 directors
- MoA & AoA preparation
- PAN & TAN for the company
- DIN for 2 directors
- Incorporation certificate
- Name reservation fees
- Current Account Opening Support.
Private Limited Company Registration in India: A Detailed Guide - Overview
Tamil Nadu, often heralded as the Silicon Valley of India, is a prime location for entrepreneurs and businesses. With its advanced infrastructure, favorable government policies, and dynamic business environment, Tamil Nadu provides an excellent foundation for establishing a business. Among the various business structures, forming a Private Limited Company (Pvt Ltd) in Tamil Nadu offers significant advantages such as limited liability protection, ease of ownership transfer, and enhanced credibility. This guide provides essential steps for setting up a Private Limited Company in Tamil Nadu.
Understanding the Basics
In India, a Private Limited Company is regulated by the Companies Act, 2013. This structure creates a distinct legal entity separate from its owners, providing limited liability protection to its shareholders. Consequently, shareholders’ personal assets are safeguarded against the company’s debts, limited to their share capital contributions.
What is a Private Limited Company?
According to Section 2(68) of the Companies Act, 2013, a private company is defined by the following characteristics:
- Restricts the right to transfer its shares.
- Limits the number of its members to two hundred, excluding certain categories.
- Prohibits any public invitation to subscribe to its securities.
Limited Liability Protection:
Shareholders are not personally responsible for business debts, safeguarding their personal assets.
Distinct Legal Entity:
The company operates independently of its shareholders, boosting its credibility and reliability.
Smooth Ownership Transfer:
Shares can be transferred with ease, facilitating smooth business succession and attracting investors.
Enhanced Funding Opportunities:
The structured nature of the company makes it more attractive to venture capitalists and banks for funding.
Continuous Existence:
The company’s operations are unaffected by changes in ownership, ensuring long-term stability.
Pre-Requisites for Forming a Private Limited Company
Before initiating the formation process, ensure the following prerequisites are in place:
- Minimum Two Directors: A Private Limited Company must have at least two directors.
- Minimum Two Shareholders: The company needs at least two shareholders, who may also be the directors.
- Registered Office Address: A physical office address in Erode is essential for the company’s registered office.
- Digital Signature Certificate (DSC): Necessary for digitally signing documents submitted to the Registrar of Companies (RoC).
- Director Identification Number (DIN): Each director must obtain a unique Director Identification Number.
Obtain Digital Signature Certificate (DSC)
The initial step is to secure DSCs for all proposed directors. These are essential for electronically signing incorporation documents submitted to the Registrar of Companies (RoC). Authorized agencies issue DSCs upon verifying identity and address proof.
Apply for Director Identification Number (DIN)
After obtaining DSCs, directors must apply for a DIN via the Ministry of Corporate Affairs (MCA) portal using Form DIR-3, which requires identity and address proof.
Name Reservation
Selecting a unique and distinct name for your company is critical. The name must not conflict with existing trademarks. The MCA’s RUN (Reserve Unique Name) service allows you to submit up to two name choices, with the approved name reserved for 20 days.
Drafting of Memorandum and Articles of Association (MoA and AoA)
The MoA and AoA are essential documents detailing the company’s objectives, operations, and internal management rules. These must align with the Companies Act, 2013.
Filing Incorporation Forms
Following name approval and drafting of the MoA and AoA, submit the incorporation application to the RoC. This includes:
- Form SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus): A comprehensive form for company incorporation, applying for DIN, PAN, TAN, EPFO, ESIC, GSTIN, and opening a bank account.
- eMoA (Electronic Memorandum of Association)
- eAoA (Electronic Articles of Association)
Additionally, provide necessary documents such as identity and address proof of directors, proof of the registered office address, and a professional declaration of compliance with all legal requirements.
Certificate of Incorporation
Upon successful verification, the RoC issues a Certificate of Incorporation, formally establishing the Private Limited Company and including the Corporate Identification Number (CIN).
Post-Incorporation Compliance
Establishing the company is just the beginning. The following steps are crucial for smooth operations and regulatory compliance:
- Open a Bank Account: Establish a corporate bank account in the company’s name for financial transactions.
- Obtain PAN and TAN: Apply for the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
- GST Registration: Register for Goods and Services Tax (GST), if applicable.
- Compliance Filings: Regularly file annual returns, financial statements, and other required documents with the RoC.
Establishing a Private Limited Company in Erode offers strategic advantages and opportunities for growth. By following the outlined steps and ensuring compliance with legal requirements, entrepreneurs can create a strong and credible business entity. Erode’s dynamic business environment, combined with the benefits of a Private Limited Company, provides a solid foundation for long-term success.
About the Author
This guide is prepared by the experts at TrueConnect, specializing in Virtual CFO services and company formation consultancy. TrueConnect is dedicated to providing reliable and authoritative guidance, making it your trusted partner in navigating the complexities of business formation in India.
FAQs
SPICe (Simplified Proforma for Incorporating Company Electronically), launched in 2016, was designed to streamline the company incorporation process. Later, the Ministry of Corporate Affairs (MCA) introduced SPICe+ to further enhance this process. SPICe+ integrates additional features, such as name approval directly within the form. The upgraded AGILE form, now known as AGILE Pro, allows for simultaneous applications for GSTIN, ESIC, EPFO, and a bank account. Additionally, SPICe+ permits modifications even after affixing the Digital Signature Certificate (DSC).
With the advent of SPICe+, name approval is incorporated into the SPICe+ form. Part-A of SPICe+ handles name approval, making the RUN form applicable only for changing an existing company’s name since February 15, 2020.
- Company Limited by Shares: Shareholders’ liability is limited to the unpaid amount on their shares.
- Company Limited by Guarantee: This type has no share capital, and members’ liability is limited to their agreed contribution in case of liquidation.
Yes, private limited companies can attract foreign direct investments, provided they comply with relevant laws and regulations.
- DIN (Director Identification Number): A unique identification number for individuals who intend to become or are directors in a company.
- DPIN (Designated Partner Identification Number): A unique identification number for designated partners in a Limited Liability Partnership (LLP), specifically for LLPs. Both are issued by the Ministry of Corporate Affairs.
Yes, a foreign national can become a director in a private limited company.
According to the Companies Act, 2013, only an individual can be a director in a company. Therefore, a company, firm, or association cannot be a director to ensure clear assignment of duties and responsibilities.
The cost of registering a private limited company in India varies based on factors such as authorized capital and the number of directors. For precise costs and professional assistance, contact TrueConnect for support in corporate compliance.
