Private Limited Company Registration: Benefits & Documents
A Private Limited Company is a privately held company for small businesses. Private limited companies are governed by the Companies Act, 2013 and require a minimum of 2 directors and 2 shareholders, of which one director is an Indian resident and an Indian citizen.
Benefits of Private Limited Company Registration
PROTECTS PERSONAL ASSETS
If the business is not able to repay the loan out of its earnings or after liquidating the assets then the personal assets of the directors or even the shareholders be attached.
In case of default banks/creditors can sell the company assets but they can’t have any right to sell the personal assets of the company’s directors.
EASY TO RAISE FUNDS AND LOANS
It is easy to raise funds and loans and this kind of entity is a preferred constitution to raise funds from the investors and venture capital investors in comparison to partnership firm.
EASY TO SELL OWNERSHIP
It is easier to sell or dilute the ownership in a Private Limited Company and even the cost involved in the transfer of ownership is less.
REPUTATION AND PRESTIGE
Your business reputation and prestige will enhanced after registration. Most important it gives third parties including customers, clients and contractors a sense of confidence.
FOREIGN CUSTOMERS AND INVESTORS
If you are planning for overseas investment or exporting your goods/services to foreign clients, then Private Limited Company is an ideal choice.
LIABILITY RISK IS LIMITED
The name “Private Limited” suggests that the liability of the Company shall be limited. This is not like the case of the partnership and the unlimited companies.
CORPORATE BANK ACCOUNT
Operating a business bank account is an important asset to your business because it will help you separate personal activities from business activities.
SEPARATE LEGAL IDENTITY OR STATUS FROM ITS OWNER
It has unique legal identity and separate legal status. A Company Identification Number (CIN) is issued to identify the registered companies.
Private limited company has less list of compliances less than the public limited company
The tax liability of the companies is only limited to the profit earned by the companies and not by the personal income earned by the owners.
IT CAN SUE AND BE SUED
It can sue and be sued in its own name or can appoint a professional to appear in court proceedings on its behalf for any case.
Eligibility of Private Limited Registration
The minimum age of the applicant should be 18 years.
The applicant should be an Indian citizen or resident.
The number of members should be between 2-200.
At least 2 directors and 2 shareholders should have their presence.
DIN ( Director Identification Number) must be available to each Director.
The minimum capital requirement for Pvt Ltd. is Rs. 1,00,000 (one lac).
The applicant should possess Company’s incorporation certificate.
Law Related to Private Limited Registration
All the private limited companies must be incorporated under the Companies Act of 2013. GST registration is mandatory for a private limited company.
Self-attested photocopy or scanned original copy of PAN Card/Passport (Foreign Nationals & NRIs)
Scanned Original copy of the latest bank statement/telephone or mobile bill/electricity or gas bill.
Scanned passport-size photograph and specimen signature (blank document with signature [directors only])
A scanned Original copy of an electricity bill of any recent month/ Property tax receipt of any recent month must be submitted.
In case if the property is rented then the electricity bill is in the name of the landlord and in the MOA the consent by the landlord to use the premises must be mentioned