Incorporation Services

What is a private limited company?

As the name suggests, a private limited company is a privately-held business entity. It is held by private stakeholders. The liability arrangement in a private limited company is that wherein the liability of a shareholder extends only up to the number of shares held by them. The shareholders cannot be held liable beyond the value of the shares. The governing body for such a company is the Ministry of Corporate Affairs (MCA).

Advantage of the private limited company

1. Limited liability: In a private limited company, there is a limited liability, which means the members of the company are not at the risk of losing their private assets. If a company fails, the shareholders are liable to sell their assets for payment
2. Less number of shareholders: Unlike a public company that requires seven shareholders, a private limited company can be started with just two shareholders.
3. Ownership: As the company’s shares are owned by investors, founders and management, the owners are at the liberty of transferring and selling their shares to others.
4. Uninterrupted existence: As mentioned earlier, the company stays a legal entity until it is legally shut down, the company runs even after the death or departure of any member.
5. Funding: A company can raise equity capital from persons or entities interested in becoming a shareholder. Entrepreneurs can raise money from angel investors, venture capital firms, private equity firms and hedge funds.
6. Separate Legal Entity: A private limited company is recognised as a separate entity legally with perpetual existence. It can have a PAN number, bank accounts, licenses, approvals, contracts, assets and liabilities in its unique name.

Following are the major and most crucial aspects which form part of the advantages of choosing a private limited entity over a LLP.

1. Ease of Procurement of Funds. Due to the reason of high level of transparency and governance in existence, it is quite a easy process when it comes to Foreign Investments, Equity or Venture capital Funding. As compared to LLP, the procurement of External Funds is a quite relaxing process for a Private limited entity.
2. Business Expansion and Diversification.

The Business expansion and diversification model is easily executable with a Private limited Entity whereas in case of an LLP the same is quite limited, the reason being, the shortcomings of the LLP agreement in execution and its modification. Every time there is a need of revamping the LLP agreement along with its statutory compliances, which is a taxing process.

3. Credit ability and Recognition

When it comes to Credit worthiness or Recognition, Private Limited Entity is way ahead of LLP. The credibility and recognition aspect is having a direct relationship with the fund-raising and procurement process. Even though having a separate legal entity, an LLP has limitations when it comes to Debt-Equity and Liquidity aspects, as the Liability of the Designated Partners are technically unlimited in case of Oppression and mismanagement.

4. Incorporation – Ease and affordability

Requirements for company incorporation:-

1. Information
2. Proposed name of Company ( at least 6 name in preference wise ) :

1. Share Capital Amount
2. Object of company
3. No of Director and shareholders
4. Ownership ratio (%age)
5. Email Id of all Directors and Shareholders
6. Mobile No. of all Directors and Shareholders

2. Documents

1. Address proof of all Directors and Shareholders
2. Pan Card of all Directors and Shareholders
3. Bank Statement of all Directors( latest by 2 months )
4. Address Proof of Office/Place (Electricity Bill latest by 2 months) and NOC/Rent Agreement
5. Passport size photo of all Directors

(In case of foreign national, the following documents need to be notarized before the Notary Public and the Certificate of Notary shall be authenticated by a Diplomatic or Consular Officer empowered in this behalf :

1. Passport- (Should be in English, otherwise Translated one)
2. Date of Birth Certificate or any Other Proof where applicant’s father’s name is written.
3. Utility Bill or Bank Statement as address proof.
4. Colour passport size photograph.

Translation:-

We at Sure Consult give you full assistance in choosing the right form of company structure to incorporating such form. At Sure Consult, we are giving 100% online assistance in corporation of Public limited company from anywhere in the world. Our experts have incorporated 1000+ company/LLP and have huge experience in setting up such forms of business.

Time Line:-

Generally time taken to incorporate company is 10-15 working days subject to government approvals and documents availability.

Fees: –

Packages

1. Class 2 digital signature will be provided

2. Upto 4 name options can be given in 1 RUN name approval request in preference. If the name is not available after four names then additional government charges of Rs. 1000/- will be applicable.

3. Authorised capital is the amount of shares a company can issue at any time and can be increased further in the future.

4. In case of incorporation in various states, the charges of stamp duty will be different in different states.

5. Business Current Account and Payment Gateway is powered by different banks. The customer will be given an option to choose from the empanelled banks. The Account Opening and Payment Gateway will be subject to terms and conditions of the banks.

6. Additional Directors can be added for an additional price of Rs.999 – if DSC & DIN is available. In case no DIN or DSC is available, cost for adding additional Director will be Rs.1999, inclusive of GST.

7. Additional authorised capital can be purchased if required at time of incorporation.

Process in completely online:-

Once we receive the professional fees online, you will receive a link. You will then just have to upload the documents on the website. We will take up the from here.

FAQs

How many members can a private limited company have?

A private limited company can be incorporated with at least 2 members and it can consist of maximum 200 members.

How a Private company is different from a public limited company?

A private company can be incorporated with only 2 members whereas at least 7 members are required for incorporation of public limited company. Also, public limited company does not cap on maximum number of members.

Can an NRI/ Foreign National be a director of a Private Limited Company?

Yes, an NRI/ Foreign National can be a director of a Private Limited Company provided there must be at least one resident director in the company.

What are the compliance requirement of the Company?

A company is required to maintain certain compliances once it is incorporated. An auditor needs to be appointed within 30 days and income tax filing and annual return filing needs to be done every year. Apart from these, mandatory compliances like ‘Commencement of Business’ forms, and DIN eKYC also needs to be done.

Is GST registration is mandatory at this stage?

GST registration is mandatory for certain businesses. Companies dealing with e-commerce operations or any other interstate activity and companies with turnover of more than Rs. 40 Lakhs are required to obtain the same.