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Do you have a brilliant idea, but are still confused about starting it? Are you one of those entrepreneurs who are seeking to start your own business in India? But to establish any business in India, you need to first select the right business structure. Embarking on a business venture in India can be an exhilarating experience, and it becomes even more advantageous when utilizing the private limited legal structure. If you are an entrepreneur and wish to grow an empire fast, then the Pvt Ltd company registration legal structure can be the best choice. Interestingly, the right support and guidance will also help you to get your business PAN card for free.
In this comprehensive guide, we will explore how you can form a private limited company, why this legal structure is best for you, the registration process, and much more. So, let’s discover the page in more detail and learn the Pvt Ltd company incorporation process.
Before starting any business in India, you need to first understand why the selected legal business structure is best for you. What advantages and principles of a private limited company influenced your decision to choose it? Here is why you need to choose Pvt Ltd to start your firm to get a free business PAN:
1. Limited Liability Protection: Congratulations, if you are a shareholder in the company, then you are liable only for the amount you invested. This determines if your financial assets are shielded with limited liability protection. Unlike sole proprietorships or partnerships, you will not be responsible for the company’s debts or financial risks, but only liable for the amount you invested.
2. Separate Legal Entity: A private limited company is a distinct legal entity, which means it is separate from its owner. The legal framework for registering a private limited company provides a layer of formality and protection.
3. Enhance Credibility: When you form a Pvt Ltd company registration, it automatically adds a layer of credibility and professionalism. The level of trustworthiness and expertise boosts the confidence of investors and clients. The legal structure further signals to them that the firm is well-established and trustworthy.
4. Easier Access to Funding: The investors and financial institutions only preferred private limited companies for the funding. Such companies are eligible to raise capital by issuing shares to investors. By providing the shares, the startups can easily gain capital.
5. Perpetual Succession: In the change in ownership or shareholder exit, the image of the company will not be affected. It means the legal structure of Pvt Ltd offers the perpetual succession advantages, which signifies that its existence will continue. For startups, registering as a Pvt Ltd company is crucial for ensuring stability and continuity in business operations.
6. Tax Benefits: Under the Companies Act, 2013, the privately held companies are taxed at a lower rate. For most startups, it is an advantageous point.
The array of benefits makes the formation of a private limited company the most preferred business structure in India.
Also Read: Thinking long-term? Here’s why pvt ltd company is your best bet
During the business incorporation, the entities in India receive the PAN, which stands for Permanent Account Number (PAN). It is one of the most important things that allocate the business with a TAN and Certificate of Incorporation. The online company registration process in India is beneficial for PAN and TAN.
To obtain the PAN, there is no need to fill out a separate application for it. It not only saves time but also costs and additional government fees. It makes the Pvt Ltd company incorporation process more streamlined and cost-effective.
For the Pvt Ltd company formation, there are specific requirements that have been set, which are important to follow before starting the registration journey.
| Minimum Shareholders | In addition, the power and responsibility of shareholders are decided by the amount that is invested in a private limited company formation. During the registration, there is a need for at least two directors. These numbers can be extended up to 200. |
| No Minimum Capital | For the incorporation of a Pvt Ltd company registration, there is no stipulation for a minimum paid-up capital. This advantage makes the registration process easy for early-stage businesses and for startups. With any amount, you can start your company venture. |
| Registered Office Address | As stipulated in Section 12 of the Companies Act, 2013, it is necessary to have a registered office in India, which must be adequately maintained. This registered office is monitored by the government authorities. This is a requirement to communicate with the government for all official documents and accounts. |
| Unique Name | Another significant requirement is the approval of the name by the ROC. This signifies you need to select a unique name under the guidelines of the CA’s name. Must ensure that the selected name is not similar to any existing company or trademark. |
| Minimum Directors | The operations of the company are handled by the directors, and they are chosen by the shareholders. To register a private limited company in India, it is necessary to have a minimum of two directors. The proposed director’s age should be above 18 for individuals. If required, there can be 15 directors in a company. The selected directors can also be the shareholders themselves. |
Also Read: Gurugram founders are not waiting and neither should you
For the startups, the Private limited company registration process can seem daunting due to its complex documentation and strict regulations. But since the online business registration in India by the government was introduced, the process has become easier and more accessible. To make the incorporation journey smoother, utilize the online platform service or get in touch with professionals who provide you with tailored advice. An expert will help you from document preparation to the issuance of a certificate of incorporation. The help and guidance of professionals make the process faster than doing it alone.
They can help you:
Start your company registration online with us today to utilize the significant advantages. The legal framework of a private limited company is popular for limited liability protection, enhanced credibility, easier access to funding, and the perk of a free business PAN. The inspiring entrepreneurs can make the process more approachable with professional guidance. Turn your dreams into reality. You are only one step away from the Pvt Ltd company formation. So take a long breath and don’t hesitate to contact us, as we will help you with every step that comes during registration. Start your entrepreneurial journey with confidence!
1. Can a foreign individual be a privately held company shareholder?
Ans. As per the Companies Act, both foreign and domestic individuals can be shareholders of a registered private limited company.
2. Why is DSC necessary during business registration in India?
Ans. To submit and sign the documents, the directors are required to have a digital signature certificate. This certificate is crucial to ensure the security and authenticity of submitted documents.
3. A private limited company can have more than 2 shareholders and directors?
Ans. Yes, the Companies Act allows a registered private limited company to appoint more than 2 shareholders and directors. But the maximum limit of shareholders is 200, while for directors it is 15.
4. What if ROC rejects the proposed company name?
Ans. If ROC rejects your selected name, you need to file another unique name. Before submission, ensure that the name is aligned with MCA’s name guidelines.
5. Can I change my private limited company name after its incorporation?
Ans. Yes, you can change the company name even after its registration. You need to register a new name with the ROC by using the Form MGT-14.