Private limited company registration in India

What it is

A private limited company is registered under the Companies Act, 2013. It is a separate legal entity from its owners, and shareholders' liability is limited to the amount unpaid on their shares. It is the structure most investors expect.

What you need

• At least two directors, who must be individuals.
• At least two shareholders. The same people can be both directors and shareholders.
• At least one director who is resident in India, meaning someone who has stayed in India for at least 182 days in the relevant year. In the year of incorporation the test is applied proportionately. Check Section 149(3) of the Act for the current wording.
• A registered office address in India.
• A name ending in "Private Limited" that the Registrar approves.
• Digital signature certificates for the people who sign, and a Director Identification Number for each director. First-time directors usually get theirs through the incorporation filing.
• No minimum paid-up capital.

The process

1. Choose the name and check availability.
2. Get digital signatures for the directors and subscribers.
3. Prepare the Memorandum and Articles of Association that set out the company's objects and rules.
4. File SPICe+ on the MCA portal with the supporting documents. The integrated form can also cover PAN, TAN and certain other registrations.
5. Receive the Certificate of Incorporation with the company's Corporate Identity Number.

How long it takes depends on name approval and on any queries the Registrar raises. We do not quote a standard number of days.

After incorporation

• Open the company bank account and deposit the subscribed capital.
• File the declaration of commencement of business within the time the Act allows. At the time of writing, the commencement form is due within 180 days.
• Hold the first board meeting within 30 days of incorporation.
• Appoint the auditor and set up the statutory registers.
• Register for GST if your business needs it. See GST registration and returns.
• Plan for annual filings, which every company must make even with no activity.

What you pay

Government fees depend on authorised capital, and stamp duty varies by state. Add professional fees and digital signature certificates. We quote after we know your capital, state and number of directors.

Is it the right choice

It suits businesses that expect to raise equity funding, issue shares to employees or want the credibility of a company. It carries more compliance than an LLP or a proprietorship. See the comparison.