Company Incorporation

Requirements of Pvt ltd Company Registration in India

1. Members- At least two members and a maximum number of 200 members or shareholders are required as per the companies’ act 2013 before registration of the company.

2. Directors- At least two directors are required for registering the private limited company. Each of the directors should have DIN i.e. director identification number which is allotted by the ministry of corporate affairs. One of the directors must be a resident of India which means she/he should have stayed in India for not less than 182 days in a previous calendar year.

3. Name- It is one of the big components for a private limited company. The name of the company includes three parts i.e. the activity, the name and private limited company. It is mandatory for all private company to use the word private limited company at the end of its company name. Every company has to send 3-4 names for approval to the registrar of the company and all the names should be unique and expressive. The name for approval should not similar with any other companies name. So choosing the right company name is an valuable component is it will stay with the company throughout its life.

4. Certified office address- While going for the certification of the company, the owner should grant the temporary address of the company until it does not get register. However, when the company has been registered then its permanent address of its registered place should be suited with the registrar of the company. The Registered place of the company is where companies main affairs are been conducted and where all the documents are placed.

5. Obtaining digital signature certificate- In this modern world everything is done online. All certificates are submitted online and for that, every company must obtain a digital signature certificate which is used to verify the authenticity of the documents. A digital signature is acquired by all the directors which are marked on all the documents by every director.

6. Professional certification- In a company there are many specialists which have required for many purposes. For incorporating a private limited company by these professionals are mandatory. Various professionals such as chartered accountant, company secretary, cost accountant etc. are required to make their certification at the time of company incorporation.

Advantages of Private Limited Company

1. OWNERSHIP- In a public company, ownership and regulation of shares can be sold to the public on an open market. On the other hand, in a private company, shares can be transferred or sold to other people by the choice of the owner. Shares of such company are owned by founders or a group of private investors. Shares here are not sold in open market thus there will be a smaller number of shareholders. This means less confusion and complexity in decision making and management.

2. MINIMUM NUMBER OF SHAREHOLDERS- For a private company, at least 2 shareholders are required, whereas, for a public company, you require a minimum of 7 shareholders.

3. LEGAL FORMALITIES- Legal formalities are sometimes very time-consuming and expensive, aren’t they? If you are planning to begin a public company, you better be prepared because there is a long list of legal formalities for forming a public company. Private companies have comparatively shorter list.

4. DISCLOSING INFORMATION- A public company is necessary to disclose their financial reports to public every quarter, as it will affect public investment; private companies are not subjected to any such compulsion.

5. DECISION MAKING AND MANAGEMENT- Decision making and management becomes more complex and confusing in public companies as a greater number of shareholders are to be consulted. This complicated procedure is eliminated in private company as the number of shareholders is less.

6. MINIMUM SHARE CAPITAL- You will be requiring a lot of money for a public company. A public company requires at least share capital of Rs. 5,00,000. For a private company, the earlier minimum number of share capital was Rs. 1,00,000, but now there is no such minimum obligation therefore, there is no pressure of fund requirements.

7. CONFIDENTIAL- It is obviously not applicable, for competitors to know about your business secrets. Confidential information such as legal settlements, executive compensation, and other essential information cannot be kept reserved in public companies. Such information is more protected in a private company.

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