Private Limited Company Registration Process

A private limited company is a business entity characterized by limited liability and a restriction on the transfer of shares. It’s a popular form of business structure for small to medium-sized enterprises (SMEs). In such a company, the liability of its shareholders is limited to the extent of their respective shareholdings, which means their personal assets are protected in case of financial losses or legal issues faced by the company.

Private limited companies enjoy benefits like ease of raising capital through the sale of shares, perpetual existence (not dependent on the life of shareholders), and the ability to enter into contracts and own property in their own name. They offer privacy as their financial information is not disclosed to the public, unlike public companies.

Private limited companies have certain restrictions, including limited transferability of shares (shares can’t be freely traded on the stock exchange), and a cap on the number of shareholders (usually limited to 50). These companies must also comply with various legal and regulatory requirements, including filing annual financial statements and adhering to corporate governance standards.

Steps Taken to Private Limited Company Registration

There are following steps taken to incorporate private limited company. They are given below:

Step 1: Get Your Digital Signature (DSC)

To start your company registration process smoothly, you’ll need something called a Digital Signature (DSC). Think of it as your online signature. 

1. Why DSC is Needed: The government requires digital signatures to complete all the online paperwork for forming your company. It’s like putting your official stamp on the forms.
2. Who Needs It: Everyone involved, like the people sign the (MOA)Memorandum of Association and (AOA)Articles of Association, should have a digital signature. It’s a must.
3. Where to Get It: You can’t just create one yourself. You’ll need to go to government-approved certifying authorities. They’re the ones who can give you a proper DSC.
4. The Right Kind: Make sure to get a Class 3 category of DSC. It’s the right one for this purpose.

Step 2: Get Your Director Identification Number (DIN)

A Director Identification Number (DIN) is like your official ID card if you want to be a director in a company. 

1. Who Needs It: Anyone who wants to be a director in a company needs a DIN. The good news is, you only need one DIN no matter how many companies you want to be a director in.
2. How to Get It: There are three ways to get a DIN:

• Option 1: If you’re becoming a director in an existing company, you can fill out a form called DIR 3. This form asks for basic info about you, like your name, and you’ll need to prove your identity with things like your PAN card or Aadhaar Card.
• Option 2: If you’re forming a new company and you and a couple of others need DINs, you can do this while filing the SPICe+ form (INC 32) for the new company. You can get DINs for up to three directors this way. If you’re forming a company with more than three directors and some of them don’t have DINs, you can always add them later after the company is formed.
• Option 3: You can also let the experts at INADVISES help you get your DIN. If you’re going for the INADVISES Private Limited Company – Registration plan, they include up to two DINs, so you don’t have to apply separately.

Step 3: Name Approval

When it comes to getting approval for your company’s name, you have a couple of options:

Option 1: Name Reservation via Part-A of SPICe+ Form Starting from February 23, 2020, the Ministry of Corporate Affairs introduced a simplified process for incorporating new companies. Part A of the SPICe+ form lets you reserve a name for your company. You can propose two names and get one chance for resubmission if your name is initially rejected due to similarities with existing registered companies, LLPs, trademarks, or not following the 2014 Companies (Incorporation Rules).

If your name gets approved, it will be reserved for 20 days. You must proceed with the incorporation process by submitting Part B of the SPICe+ form. The good news is that you don’t need a Digital Signature Certificate (DSC) or Director Identification Number (DIN) for this step, but you must have an MCA Account.

Option 2: Name Approval by Filing Part-A and Part-B Together Alternatively, you can combine the name approval and incorporation application by filing both Part-A and Part-B of the SPICe+ form together. However, you can only propose one name in this case.

If your proposed name isn’t approved, you get a second chance to resubmit the same SPICe+ form without any additional charges. This means you have two attempts with the same document without paying extra. You can resubmit the SPICe+ form for both name approval and incorporation using the ‘name applied for’ or ‘application number’ link on your user dashboard.

If your name isn’t approved in the second attempt, you can start the SPICe form process from scratch. This will likely be cheaper than choosing the first option. The entire process, including name approval and incorporation, typically takes around 2-3 days.

Step 4: Form SPICe+ (INC-32)

Starting from February 23, 2020, the Ministry of Corporate Affairs introduced a user-friendly form called SPICe+ for registering new companies. This form is designed to streamline the incorporation process and make it more accessible online.

Once your proposed company name is approved, you can click on the approved name link on your user dashboard to continue the incorporation process. Part-B of the SPICe+ form is where the magic happens. It allows you to do several important things, all in one go:

1. Application for Director Identification Number (DIN): This is a unique number for company directors.
2. Reservation of Company Name: Your company’s official name is secured.
3. Incorporation of the New Company: The actual creation of your company happens here.
4. Application for PAN and TAN: These are essential tax-related registrations.
5. Application for EPFO Registration: Mandatory for employee benefits.
6. Application for ESIC Registration: Also mandatory for employee benefits.
7. Application for Professional Tax Registration: Only if you’re operating in Maharashtra.
8. Application for Company Bank Account: A mandatory step for financial transactions.
9. Allotment of GSTN (Goods and Service Tax Registration Number): Optional if you’re applying for GST registration.

The beauty of SPICe+ is that it simplifies data entry and instantly validates your information, making the incorporation process seamless and quick. Whatever you fill in Part-A and Part-B of SPICe+ automatically populates related forms like AGILE-PRO, eAoA, eMoA, URC1, and INC-9 (if applicable).

Now, here’s the technical part: After you fill out SPICe+, you need to download it in PDF format and digitally sign it. The digital signature should come from a professional like a Chartered Accountant, Company Secretary, Cost Accountant, or advocate. This professional certifies that all the information in the form is accurate.

Before May 2015, starting a company required filling out several different forms for things like Director Identification Number (DIN), company name, Memorandum and Articles of Association, registered office, and director details. But as of January 2018, these forms have all been combined into SPICe+. The RUN service is now only for changing existing company names. For new company incorporations, SPICe+ is the only way to go. 

Step 5: e-MoA (INC-33) and e-AoA (INC-34)

Now, let’s talk about e-MoA and e-AoA, which stand for electronic Memorandum of Association and electronic Articles of Association. These forms are here to make the process of registering a company in India much simpler.

Memorandum of Association (MoA) is like the company’s charter. It outlines the big picture of what the company is about, its goals, and the fundamental objectives it aims to achieve.

Articles of Association (AoA) are like the rulebook for the company. They contain all the internal rules and regulations that the company and its members need to follow.

In the past, you had to physically file these documents. But in present, thanks to technology, you can do it online through the MCA portal. These forms are linked to the SPICe+ form we mentioned earlier (INC-32).

Here’s the important part: Both e-MoA and e-AoA must be digital signature online by the people who are subscribing to the Memorandum and Articles of Association. This ensures that the key stakeholders are on board with the company’s goals and rules. It’s all about making the process smoother and more efficient.

Step 6: PAN and TAN Application

The SPICe+ form we’ve been talking about, you can also apply for your company’s PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) in one go.

Here’s how it works: Once you submit your SPICe+ form, the system automatically generates the forms for PAN and TAN. These are important for your company’s taxation and financial activities.

After your SPICe+ form gets approved, the government issues your Certificate of Incorporation for your Private Limited Company (PLC) along with the PAN, which is allotted by the Income Tax Department. You’ll receive this important document through email from the Ministry of Corporate Affairs (MCA).

As for the actual PAN card, you’ll get that from the Income Tax Department. So, with just one form, you’re well on your way to getting your company legally set up and ready for business.

Documents required for filing form spice+ Inc-32

Following are the documents required to incorporate a private limited company. They are given below:

A. When the Director and Subscriber are Indian Nationals

1. All the individuals who want to become company shareholders must provide a signed statement (Affidavit) confirming their willingness.
2. Proof of the company’s office address, like a rental agreement or ownership deed (if you own the office space).
3. Recent copies of utility bills, such as electricity, water, or gas bills, from the last two months.
4. If the company’s name contains certain specific words, you’ll need to attach the central government’s approval.
5. If your company name is based on a registered trademark, you should attach the trademark registration certificate or the application copy.
6. If you’re renting your office space, you’ll need a No Objection Certificate (NOC) from the property owner.
7. If any subscribers or directors don’t have a Director Identification Number (DIN), provide their proof of identity and address.

B. When the Director or Subscriber is a Foreign National

1. Passport as proof of identity.
2. Address proof, which can be a driving license, residence card, bank statement, or any government-issued ID with an address.