Private limited company in India

What is a Private Limited Company?

Private Limited Company is one of the most common legal entity and this is governed by the companies Act 2013.A Private Limited Company is a type of organization that can set up to run the business. Company ownership can be split in the shares that are owned by shareholders.

Every company in India is established under the Companies Act, 2013 (‘Act’).An Indian company must have at least one director who is an Indian citizen. The Board cannot have only foreign directors, but they can be appointed as an executive or an independent director in an Indian company.

Documents Required for Company Registration

To register private limited company the following proof of identification are mandatory for the directors.

Indian Nationals: PAN card mandatory for those who are residence of India.

Foreign Nationals: Passport is mandatory for those who are not resident of India
In addition to the above documents, address proofs of the Directors are also mandatory.

Indian Nationals: Passport / Driver’s License / Election ID / Ration Card / Aadhar ID is mandatory for those who are residence of India.
Foreign Nationals: Drivers License / Bank Statement / Residence Card those are not resident of India.
At last, as proof of residency, the prospective Directors must produce one of the following documents. Latest documents should be submitted not more than the period of last two months:

Indian Nationals: Bank Statement / Electricity Bill / Phone Bill/Mobile bill
Foreign Nationals: Bank Statement / Electricity Bill / Phone Bill/Mobile bill

If the Company have foreign shareholders following documents need to be submitted additionally

Board resolution authorizing investment in the company is mandatory
Incorporation Certificate of the Company is necessary and
Finally the company should submit address proof of the company

Company Registration Process

The following are the steps involved in registering a company in India:

Step 1: Spice Name reservation Form

Spice Name reservation is the part of the Incorporation forms is the application to file and reserve the company name. normally 1 or 2 name approval application with business objectives can be submitted. If the name is rejected thealternative unique names need to be submitted

Step 2: Digital Signature for Directors

To confirm authenticity of online document a Digital Signature is essential. To avoid financial scams Director Identification Number (DIN) is mandatory for current and prospective directors of companies. During the company registration the Ministry of Corporate Affairs made Digital Signature Certificate(DSC)mandatory . Only the Directors who is authorized for e-filling purpose are required to obtain a DSC.Digital Signature helps to secure data in addition to this it saves time for physical signatures

Step 3: Incorporation Application Submission

Once we obtain Digital signature then Incorporation application can be filled in SPICE+ form to the MCA with all relevant data. SPICE+ form is the new-based form of SPICE form. Along with the incorporation application, the Articles of Association (AOA),the Memorandum of Association(MOA) are also filled along with the details of PAN and TAN.

Private Limited Company Compliances

Private Limited Company once registered in India there will be various compliances that should be maintained from time to time to avoid penalties and additional fees. Below are some compliances of the company that would be required to complete after company registration.

Auditor Appointment:

An auditor is a qualified professional who is trained to verify all the data of the company. According to the section 136(6) of Companies Act 2013, a Private Limited Company should appoint an auditor within the 30 days of registration of the company is done in presence of all board members. Chartered Accountant is eligible to be an Auditor of the company if is in practice.

Director DIN KYC:

Every individual who is allotted DIN (Director Identification Number)as on 31st March which is the financial year end must submit their KYC on or before September immediately next financial year to check the validation of Directors phone and email address on record with the Ministry of Corporation Affairs.

Commencement of Business:

Commencement of Business is the declaration filed by the Directors with the registers. A Private Limited Company having share capital cannot commence business until it has obtained the certificate of commencement of business (COB) and that form should be filed within 180days of incorporation.

MCA Annual Filings:

The Private Limited Companies must file a copy of Financial statements to the Ministry of Corporate Affairs each financial year.As a part of Annual filling following e-forms are to be filled to the ROC.

1.Form MGT-7 ,this Form is about Annual returns.2 Form AOC-4 is about Financial statements both these forms should be filled by signing digitally by the Directors and a practicing professional.

Income Tax Filing:

Every year all companies must file an income tax return before the due date-irrespective of the incorporation date.The income tax return of the company can be filed online and it must be digitally signed by one of the Director’s Digital Signature.

Registered Office of Company

Registered office is the permanent address of the Company or business. It is the main office of the Company where all communication relating to the company is sent by the governmental departments. All the companies which are registered in India are required to maintain a register office in India. During the incorporation of the Company the details pertaining to registered office address need to be given along with address proof and NOC of the owner of the premises for usage of premises as registered office of the Company

Register office of the company can be changed after the incorporation is done in case required, if the change of register office is within the same state the process will take less time and documentation but if the registered office is changed from one state to other state, then the documentation and process related to the same will take more time for approval from the Regional director and Registrar of Companies.

Opening of Bank Account for Private Limited Company

To open a bank account for private limited company the following documents are required.
1. Memorandum of Association (MOA)

2. Article of Association (AOA)
3. Certificate of Incorporation.
4. Board Resolution for authorization to open current account and signatory
5. Address proof of registered office address.