Private Limited Company Registration

Private Limited Companies (Pvt Ltd) is a popular type of corporate legal entity and most sought-after business form in India. A private limited can be formed with two directors and two shareholders. Directors and shareholders can be same people and a private limited can have other corporates as shareholders.

Private limited company got features such as
1) Limited liability – ie your liability is limited to the extent of the unpaid capital
2) Separate legal existence – a private limited is a separate legal person
3) Perpetual succession – ownership passes to the successors of shareholders automatically
4) Transferability of shares – ownership can be transferred in a matter of minutes
5) Private limited companies are the preferred entities for venture capitalists and, if you plan to raise capital from investors you should choose a private limited

Documents required

• Copy of PAN
• Copy of Aadhar Card or Driver’s License or Passport or Voter’s ID
• Address Proof – Latest Bank Statement or Telephone or Mobile Bill (not older than 2 months)
• Passport Size photograph in JPEG format.
• Address Proof of place of business- (Electricity Bill/Tax Paid receipt) and No objection letter from owner of the premise

Process

• Filing company name application (The name approval is going to be the most time consuming process if you do not have an unique name to your business. Registrar of companies may reject the names which are similar to existing name phonetically or in spelling. You may get a rejection if there are resembling trademarks or the name applied is generic in nature.)
• Applying digital signature certificate for the director’s and shareholder’s
• Preparing Memorandum (main objects of company, capital – shareholding pattern are covered in MoA) and Article of associations (bye laws for the operation of the business are covered in AoA)
• Filing incorporation forms with MCA
• Obtaining certification of incorporation, PAN and TAN

Tax

• Corporate tax
  It is the Income tax on profits of a private limited. Corporate taxes on profits in India are 30%, but if the turnover of a company does not exceed 5 crores, tax rate is 29%. Profit making companies requires to pay advance corporate tax on a quarterly basis.
• Dividend Distribution Tax
  A company is subjected to dividend distribution tax (DDT) as well when it pays dividend to its shareholders. Under the Income Tax Act, DDT is charged at the rate of 16%.
• Good and Services Tax (GST)
  Any business dealing in purchase and sales of goods and services in India comes under purview of Indirect Taxation. You have to enroll for GST as and when you reaches the turnover thresholds.
• Audit and Compliance
  Statutory Audit and maintenance of books of accounts is mandatory if you are running a private limited company. You have to appoint a statutory auditor once you incorporate your private limited company. Annual reporting of financial position and operations of the company to Registrar of companies and Income Tax department is mandatory.