Limited/Private Limited Company

    Private Limited Company Registration in India

    A private limited company in India is governed under the Ministry of corporate affairs (MCA). Registering a company is easy through IndiaFilings, as it is done completely online. To register a company in India a minimum of two people are required to act as directors and shareholders. To register a Private limited company in India the Director’s PAN card, address proof, and the bank statement are required with the address proof of the registered office.

    Section 2 (68) of the Companies Act, 2013 defines a private company as:

    A company having a minimum paid-up share capital as may be prescribed, and which by its articles,

    • restricts the right to transfer its shares;
    • except in case of One Person Company, limits the number of its members to two hundred;
    • prohibits any invitation to the public to subscribe to any securities of the company.

    It is highly recommendable to get a private limited company registration as this type of company offers limited liability to the shareholders with certain restrictions that are placed on the ownership.

    Private Limited Company is the most popular type of business entity in India. Over 20 lakh companies have been registered in India as of October 2020 and 12 lakh companies are classified as active. All companies registered in India are governed by the MCA (Ministry of Corporate Affairs) under the Companies Act, 2013.

    Requirements to register a Private Limited Company in India

    No of Shareholders 2 individuals
    No of Directors 2 individuals ( Can be 3)
    Authorized Capital Rs. 1 lakh minimum
    Paid-up capital Rs. 10,000

    NOTE: This is just a primary requirement the no of directors can be increased to 15 and the number of shareholders can be increased to 200.

    Features and Advantages of Various Business Entities

    Features Proprietorship Partnership LLP Company
    Definition Unregistered type of business entity managed by one single person A formal agreement between two or more parties to manage and operate a business A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company. Registered type of entity with limited liability to the owners and shareholders
    Ownership
    • Sole Ownership
    • Min 2 Partners
    • Max 50 Partners
    • Designated Partners
    • Min 2 Directors
    • Min 2 Shareholders
    • Max 15 Directors
    • Max 200 Shareholders

    For One Person Company

    • 1 Director
    • 1 Nominee Director
    Registration Time 7-9 working days
    Promoter Liability Unlimited Liability Limited Liability
    Documentation
    • MSME
    • GST Registration
    • Partnership Deed
    • LLP Deed
    • Incorporation Certificate
    • MOA
    • AOA
    • Incorporation Certificate
    Governance Under Partnership Act Under Companies Act 2013
    Transferability Non Transferable Transferable if registered under ROF Transferable
    Compliance Requirements
    • Income tax filing if turnover is more than Rs.2.5 lakhs
    • ITR 5
    • Form 11
    • Form 8
    • ITR 5
    • ITR 6
    • MCA filing
    • Auditor’s appointment