Goods & Service Tax
Private Limited Company Registration
Are you thinking of starting a company? If so, you'll need to register your business with the government. This process can seem daunting, but we're here to help. In this blog post, we'll walk you through the basics of company registration in India. First, you'll need to choose a business structure. This will determine the legal framework for your company and how it will be taxed. Common business structures include sole proprietorships, partnerships, limited liability partnerships (LLPs), and Companies. Once you've chosen a business structure, you'll need to obtain a business license or permit from your local government. This will allow you to operate your business legally.
Next, you'll need to register your company with the government. This will usually involve filing paperwork with your local business registry. In some cases, you may also need to register with national or regional level organizations. Finally, you'll need to obtain any necessary licenses or permits required to operate your business. This could include a license to sell certain products or services, or a permit to operate in a specific location. With all of this in mind, let's take a closer look at the specifics of company registration in India.
Get your private limited company registered in the fastest possible manner.
It usually takes 7 to 10 working days.
- DSC (2 nos)
- Filing of SPICe+ Form
- Issue of Incorporation Certificate along with PAN and TAN
- Includes Govt Fees & Stamp duty for Authorised Capital upto Rs. 1 Lakh except for the states of Punjab, Madhya Pradesh and Kerala
- Excludes foreign national / Body Corporate as director or business needing RBI/SEBI approval
- Assistance in Opening Bank Account
- Businesses looking to expand or scale operations on higher level
- Startups looking to raise capital and issue ESOPs
- Businesses looking to convert their existing firm structure into private limited company
- Businesses aiming to work globally or with reputed clients
DSC Application
Name approval form filing
Preparation of Incorporation Documents
Getting those docs signed by the respective stakeholders
Filing of e-Forms with ROC
Receipt of Incorporation Certificate with PAN, TAN, GST, EPF, ESI & Bank Account.
Name, Contact Number and Email Id of all the Stakeholders.
Directors Identification Number, if already.
Self Attested PAN, Aadhar & Passport size photo of all the Stakeholders.
Apostilled Passport, Mobile Bill and other KYC docs in case of NRI Stakeholder.
Latest Month Personal Bank statement of all the Stakeholders.
Specimen Signatures of all Stakeholders.
Few Proposed Business Names along with Objects.
Latest Electricity Bill/Landline Bill of Registered Office.
NOC from owner of registered office, If Owned. (Download Template)
Rent Agreement from Landlord, If Rented/Leased. (Download Template)
Brief description of main business activities of the proposed Company.
Shareholding pattern (50:50 or 60:40) between the Stakeholders.
Authorised & Paid Up Share Capital of the Company.
Choose from the best curated options for you!
Basic
Checking Name Availability
2 DSC (Digital Signature) Tokens
2 DIN Numbers
E-MOA & E-AOA
Government Charges
Incorporation Certificate
PAN & TAN
Opening of Bank Account
GST Registration
MSME-SSI Registration
Standard
Everything in Basic Package +
Start Up India Registration
OR
E.P.F Registration
E.S.I Registration
OR
Trademark Registration
Premium
Everything in Standard Package+
Domain Registration
Website Designing & Creation
2 Custom Email ID
All About Private Limited Company Registration in Detail.
What is Private Limited Company Registration?
Private Limited Company Registration is the most common and trustable type of company. A Private Limited Company Registration is the most popular form of structure for businesses. A Private Limited Company must have at least two active directors as to any given point of time the maximum number of director fifty members in a typical private limited company. There can only be 20 directors in a Banking company. The unique feature of a private limited company is that its directors have limited liability to creditors. It comes in handy in a case of default, where banks/creditors can not touch the company's director, neither can they sell their assets. The creditors can only sell the company's assets. If you want to start a company in India, make sure you incorporate a Private Limited. It is essential to incorporate your company as a registered company with multiple advantages from easy to incorporate and dissolve.
Minimum Requirement for Private Limited Company Registration
- A minimum number of two Directors who are adults are required for Private Limited Company Registration.
- One of the Directors of a Private Limited Company has to be an Indian Citizen and Indian Resident.
- The other Director(s) can be a Foreign National for Private Limited Company Registration.
- It is also required to have two Shareholders of a company for Private Limited Company Registration.
- The Shareholders can be natural persons or an artificial legal entity for Private Limited Company Registration.
Guidelines for Choosing Company Name
1. Make sure the name is unique and not already in use by another company.
2. The name should be reflective of the company's business.
3. Avoid names that are too generic or too specific.
4. Keep it simple and easy to pronounce.
5. Make sure the name is available as a .com domain.
6. Avoid using initials or abbreviations in the name.
7. Conduct a trademark search to make sure the name is not already trademarked.
8. Get creative! A unique name will help your company stand out from the crowd.
Choosing a company name in India can be a bit of a challenge, but it's worth taking the time to get it right. By following these tips, you can ensure that your company name is both unique and reflective of your business.
Basic Features & Characteristics of a Private Limited Company Registration:
Private Limited Company Registration Process
Private Limited Company Registration in India is complete an online process. Recently the Ministry of Corporate Affairs has replaced the earlier SPICe form with a new web form called SPICe+ (SPICe Plus). Hence, Private Limited Company Registration is even easier now.
Now you can complete the Private Limited Company Registration, with a single application for Name Reservation, Incorporation, DIN Allotment, Mandatory issue of PAN, TAN, EPFO, ESIC, Profession Tax (Maharashtra), and Opening of Bank Account.
SPICe+ is divided in two parts as follows:
1. Part A: Apply for the Name Reservation of the company in Part A of the form Spice+. It can be used for taking the name approval of the proposed Company and also for filing Company Registration in one go.
2. Part B: In Part B of the Form Spice+, apply for the following services:
- Incorporation
- DIN (Director’s Identification Number) allotment
- Mandatory issue of PAN
- Mandatory issue of TAN
- Mandatory issue of EPFO registration
- Mandatory issue of ESIC registration
- Mandatory issue of Profession Tax Registration(Maharashtra)
- Mandatory Opening of Bank Account for the Company and
- Allotment of GSTIN (if so applied for)
Tax Benefits of a Private Limited Company
Companies for the purpose of Income Tax include Indian companies, body corporates incorporated under the laws of a countries outside India, body corporates / institutions being assessed as companies as per the earlier laws in force, body corporates – Indian or not, incorporated or not, declared as a company by general or special order of the Board, for the period specified in such declaration/ order.
Further, Companies that are not domestic companies, are termed as foreign companies for Income Tax purposes. As we are aware, Companies, having separate legal identity being an artificial person created by law, are also included in the definition of a ‘person’ for Income Tax purposes. Such that, any provisions which is applicable to a person would be applicable to a company as well unless specifically excluded. Some of the noteworthy benefits available to companies are discussed as under:
Tax rate reduced to 25% from 30%
With effect from financial year [“FY”] 2018-19, the income tax rate stands reduced to 25% (plus applicable surcharge and cess) for domestic companies with total turnover or gross receipts not exceeding Rs. 250 crores for the year ended 31 March 2017.
Provisions of Minimum Alternate Tax [“MAT”] are made inapplicable to certain foreign companies
The provisions of MAT are made inapplicable to foreign companies that have opted for presumptive taxation. Foreign companies that are engaged in the business of shipping, air transport, oil exploration, and turnkey construction projects are benefited by this.
Transfer of certain capital assets not treated as transfer for income tax purposes
For the purpose of Income Tax, sale, relinquishment or extinguishment of rights in assets would be considered as transfer of assets. Further, any gains arising out of such transfers to a person who is transferring such capital assets, is offered to tax as capital gains. However, in order to facilitate merger of uneconomic units with financially sound Indian Companies, in the interest of increased efficiency and productivity, certain transfers are specified that are not to be treated as transfer for income tax purposes. Some of the significant transactions specified in this regard are discussed as under:
- Transfer of capital asset by a parent company to its wholly owned Indian subsidiary
- Transfer of capital asset by a wholly owned subsidiary company to its Indian holding company. Provided, conditions prescribed in this regard are satisfied.
- Transfer of capital asset in a scheme of amalgamation by amalgamating company to Indian amalgamated company.
- Transfer of capital asset in a scheme of merger by demerged company to Indian resulting company
- Allotment of shares of Indian amalgamated company to the shareholders in the amalgamating company in lieu of their amalgamation
- Transfer of capital assets by a private limited company or unlisted public company to a limited liability partnership [“LLP”] in course of conversion of company into LLP. However, the same would be subject to satisfaction of certain conditions prescribed in this regard.
Deduction on expense incurred in relation to setting up/ extension of a business
Any expenditure incurred by a Company for setting up of a business or for extension, is eligible to be amortised and claimed as an expense over a period of five consecutive years beginning from the year in which the business commenced/ expansion of business is completed. This enables a Company to defer the claim of expenditures incurred towards preparation of project report, feasibility report, legal charges for drafting agreements, incorporation fee etc. over a period of 5 years. However, such claim shall be restricted to 5% of capital employed by the Company.
Further, any expenditure incurred by a Company in course of amalgamation or demerger could also be amortised and claimed over a period of five consecutive years.
Deduction specific to the nature of the business of the Company
Tax incentives are generally introduced to encourage businesses to venture into certain sectors that are significant for the economic development of the nation. Any company engaged in such specified business, would be eligible for tax holiday or deduction with respect to the profits earned from such business for a period prescribed in this regard. However, it is important to note that many of such incentives introduced earlier are now in their sunset period.
Indian Companies engaged in developing, maintaining and operating infrastructure facility, conducting scientific and industrial research and development etc. are some of the companies that are benefited by this.
Deduction specific to contributions made
100% of amount contributed, by medium other than cash, to any political party or electoral trust is allowed as a deduction to a Company for tax purposes.
Reduced rate of tax on dividends received from certain companies.
Dividends received from a foreign company wherein the Company holds 26% or more shares are subject to tax at a reduced rate of 15%. Further, the dividends received from such companies are to be reduced from dividends distributed/ payable in computation of Dividend Distribution Tax [“DDT”], which in turn reduces the DDT liability.
Insolvency resolution
Loss making companies under insolvency may carry forward and set off their losses even if there is a change in shareholding by more than 49%.
Restrictions of a Private Limited Company
- One of the main disadvantages of a Private Limited Company is that it restricts the transfer ability of shares by its articles.
- In a Private Limited Company the number of shareholders in any case cannot exceed 50.
- Another disadvantage of Private Limited Company is that it cannot issue prospectus to public.
- In stock exchange shares cannot be quoted.
Difference between a Limited & Private Limited Company
Ltd and Pvt Ltd are both types of business entities that are popular in India. Both have their own advantages and disadvantages, so it is important to understand the difference between the two before deciding which one is right for your business. Ltd is short for limited liability company. This type of company is owned by shareholders who have limited liability for the debts and losses of the company. Ltd companies are required to have at least two shareholders and a maximum of fifty. Pvt Ltd is short for private limited company. This type of company is owned by a maximum of fifty shareholders. Pvt Ltd companies are not required to have a minimum number of shareholders, but most have two or more.
There are some key differences between Ltd and Pvt Ltd companies. Ltd companies must have their financial statements audited by a chartered accountant, while Pvt Ltd companies are not required to do so. Pvt Ltd companies also have more restrictions on share transfer and cannot list their shares on a stock exchange. So, which type of company is right for your business? It depends on a number of factors, including the size and structure of your business and your goals for the future. If you are unsure, it is always best to speak to a professional before making a decision. For detailed comparison visit here
Q. What is Spice+ Process of Incorporation ?
SPICe (Simplified Proforma for Incorporating Company electronically) is the new modus operandi for Registrar Of Company works. Its a fast track registration procedure initiated by the Ministry of Corporate Affairs, enabling a single form application process of Private Limited Company Registration. The regular Private Limited Company Registration route can take up to thirty days, but with SPICe, the whole process can be closed within seven days.
TAXAJ aims at rendering premium services and speedily delivering them. Therefore, the incorporation services always follow the SPICe route.
Q. I want to start a business in App Development. What other registrations will apply to me?
Company along with GST & Trademark will be good to start with.
Apart from getting your GST registration, it would help to protect your brand by registering the trademark. If you are building any proprietary software of a unique kind or any other intellectual property, you must apply for the copyright. Our professionals can assist you with trademark and copyright registration.
Q. Do I need to be physically present during this process?
No, your physical presence is not required during the process. Only a few signed documents emailed to us or couriered to us is sufficient for the procedure.
Q. I already have my DSC & DIN. Will the package be discounted now?
Yes, of course! We only charge for what we do.
In case, you already have a DSC and DIN, our experts will offer you some concession accordingly on the above package.
Q. Do I need to apply for GST, EPF, ESI & Bank Account mandatorily in SPice+ Form ?
Yes, since this is a consolidated form for Incorporating a company so these will be auto-applied in the state if chosen. However, filing and compliance of the same shall be done once it is actually applicable to the company.
Q. How can i become eligible to get benefits under the Startup India initiative?
Only the below-stated entities qualify as a "Startup" for Government schemes.
👉 Private Limited Company
👉 Registered Partnership Firm
👉 Limited Liability Partnership Further conditions are:
👉 It's newer than five years have passed from the date of its incorporation/ registration.
👉 Turnover has been below INR 25 crore.
👉 It works towards innovation & commercialisation of new product.
👉 It is working towards the development or deployment of the service sector
👉 It has a process driven by technology or intellectual property of a new kind.
Our experts shall guide you on getting registered under the Startup India Initiative and avail the benefits.
Q. I need to raise capital from external sources. I am considering approaching Investors. Do i get any advantage on getting registered as a private limited company over other forms?
Apart from getting your GST registration, it would help to protect your brand by registering the trademark. If you are building any proprietary software of a unique kind or any other intellectual property, you must apply for the copyright. Our professionals can assist you with trademark and copyright registration.
Q. Is stamp duty payable during incorporation process?
Yes, the State government in which the registered office is located imposes Stamp duty charges. The charges are on MOA, AOA & INC32 form. These charges are all included with our costing for all the states. We will inform you before any commitment for the additional charges, if any.
Q. Can an NRI also become a director in company? And what additional documents will be required to be submitted?
Yes, an NRI or foreigner can be a director in a Private Limited company. But such a person can be taken as a director only when one director is a Resident of India. Additional documents required:
👉 1. Identity Proof - Copy of Passport Copy (Appostiled by Consulate of Indian Embassy or Foreign Public Notary)
👉 2. Address Proof - Copy of Driving License or Business Visa
👉 3. Utility Bill - Bank Statement or Electricity Bills copy or Any Property Tax Payment Receipt attested by Consulate of Indian Embassy or Foreign Public Notary.
RBI approval is required for foreign capital contribution. Therefore, additional charges will be applicable for RBI approval. Our experts will advise you on the applicable charges.
