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Friday, September 13, 2019

Private Limited Company Registration Process | Company Incorporation | RDJ Consultants


Private Limited Company Registration Process

A Private Limited Company is a Company registered under Indian Companies Act, 2013 or any previous Companies Act. As the suggested by the term “Limited” in the name itself, the liability of the members i.e. owners is limited to certain extent. Also, there are certain restrictions laid combined with privileges offered.

For the Incorporation of Company, the concerned Ministry i.e. Ministry of Corporate Affairs (MCA) mandates the process of Incorporation by filing all the required forms on their online platform (, which assures the fast and easy process. The Government of India now-a-days promotes the Incorporation of Business in India along with the “Make in India” campaign. After adhering the procedure laid under Act, the establishment and commencement of the Company is easy

Steps for Private Limited Company Registration:

It takes only 4 steps to register a private limited company within time span of 15 to 18 days. The same can be classified in following main heads:

Acquire DSC for Directors and Subscriber:

The first and foremost step is to acquire the DSC of the Directors and Subscribers to MOA. DSC stands for Digital Signature Certificate. Any e-form is filed with the Ministry after affixing the DSC of the Authorized Signatory for Company Incorporation. Also, it is required for the application of DIN of the directors. Further, DSC of the subscriber is needed to file MOA and AOA.

Obtain DIN for Directors

DIN is abbreviation of the term Director Identification Number. It is a number allotted by the Ministry to the Individual for acting as Director in a company. DIN is unique such as PAN Card to any person and which is applied and allotted once in the lifetime.

Name approval Application

The first step is to make an application for reservation of name for the proposed company. The application is to be made in Form INC-1, where one can apply for maximum 6 names in order of the preference. One shall keep in mind that the names applied are not identical or nearly resembling with any existing Company or LLP or Registered Trademark.

Once the name applied is approved, it is reserved for the applicant for a period of 60 days, in span of which one has to apply for the Incorporation of Company, non-compliance of which leads to withdrawal of the name granted by the Ministry.

Application for Certificate of Incorporation

Once the name is reserved for the proposed company, one shall proceed for making Application of Certificate of Incorporation in SPICe form accompanied with SPICe_MOA and SPICe_AOA.

The application is submitted by paying the requisite Stamp Duty as applicable in case of concerned state on the portal. Once the application is submitted, form for application of PAN and TAN of the company is generated online, which shall be duly submitted after affixing the DSC with MCA.

Formulation of MOA and AOA

MOA and AOA stands for Memorandum of Association and Articles of Association, respectively. These are two most important documents for any company.

MOA of company states the scope of operations of the company, whereas AOA states how the company will be carrying the operations as per the laid Act. In case of a Private Limited company, the Articles shall mandatory consist the following three clauses in addition to general clauses:

  • Limitation on the number of members up to 200.
  • Restriction on transfer of shares.
  • Prohibition on accepting securities from public.

For submitting this application, one shall collect following documents first:

  • Utility Bill and NOC from the owner for the Registered Office address of the Company;
  • Rental Agreement with the owner of registered office, if premises is rented;
  • Consent to act as a Director of the company in form DIR – 2;
  • Affidavit and declaration by first subscriber(s) and director(s) in form INC – 9 (duly franked and notarized);
  • Certified True copy of the self-attested Identity proof of the first subscriber(s) and director(s).
After due verification of the application and documents provided, the concerned RoC may grant the Certificate of Incorporation (COI), which is a conclusive proof of existence of the company, wherein the date of Incorporation, Company Identification Number (CIN) and Permanent Account Number (PAN) is mentioned with the sign and seal of the Registrar.

Once, the Certificate of Incorporation is granted, the company may commence the Business Activity as the Incorporation procedure is completed.

FAQ on Private Limited Company Registration

How do I start a private limited company?

All that is required are PAN card of the promoters, address proof and bank statement copies of the promoters along with address proof for the registered office address. A company can be started in about 3–7 days. If you have the necessary documents, sign up for one of our packages and have a company registered with guidance from one of our Advisers 

What is limited liability ?

Limited liability is the status of being legally responsible only to a limited amount for debts of a company. Unlike proprietorship and partnerships, in a private limited company the liability of the shareholders in respect of the company’s liabilities is limited. In other words, the liability of the shareholders of a company is limited only to the value of shares taken up by them.

What is authorized capital of the private limited company?

Authorized capital is the maximum value of equity shares that can be issued by a company. On the other hand, paid up capital is the amount of shares issued by the company to shareholders. Authorized capital can be increased after incorporation at anytime to issue additional shares to the shareholders.

Difference between authorized capital and paid-up capital

  • Authorized Capital or Nominal Capital: means such capital as it is authorized by memorandum of a company to be the maximum amount of share capital of the company
  • Paid-up capital: Paid-up capital is the amount of money a company has received from shareholders in exchange for shares of stock. Paid-up capital is created when a company sells its shares on the primary market directly to investors

What are the requirements for starting a private limited company?

To register a private limited company, a minimum of two people are required to act as directors and shareholders. The directors must be natural persons, while the shareholders can be natural persons or corporate entities. In addition, a registered office address in India is also required for company registration.

Can registered office be a residential property?

Yes, a residential property can be used as a registered office of a company. However, empty land or vacant buildings cannot be used as a registered office.

Can NRIs and foreign nationals or foreign entities register a private limited company?

Yes, NRIs, foreign nationals and foreign entities can register a company and invest in India, subject to the Foreign Direct Investment norms set by the RBI. However, incorporation rules in India require for one Indian national to be a part of the company on the Board of Directors.

FDI in Private Limited Company: FDI in Private Limited Company is allowed for non-resident entities, subject to the FDI Policy and sectoral caps. FDI in a Private Limited Company falls under two categories, automatic route or approval route. FDI is permitted upto 100% in most of the sectors other than those sectors which are capped or restricted. In cases where automatic approval is not allowed, prior approval from the Foreign Investment Promotion Board (FIPB) of the Government of India must be obtained prior to the investment. Further, citizens or entities of Bangladesh or Pakistan can invest in India, only under the approval route.

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