As of now, a private limited company is one of the greatest business structures or entities in India. Standard legal compliance, optimum tax compliance, support finance requirements, limited liabilities for directors/shareholders, increased brand recognition and recommended alternatives for startups and SMEs are the major benefits of a private limited company.
What is a Private Limited Company
A private limited company is a type of business structure or entity that can legally conduct small, medium, and large-scale business. This sort of corporate entity makes it simple to raise funds and has limited responsibilities.
Requirements for forming a company:
- Two directors are required at a minimum
- Proposed Directors' PAN Card Copies [Obtain attestation from a bank manager or a Gazetted officer.]
- Proposed Directors' ID proof (passport, driver's license, or voter's ID) [Attested by a bank manager or a Gazetted officer]
- All directors must show proof of current residence (bank statement, utility bill, or cell phone bill) (Self-attested)
- Proof of the prospective Registered Office's address (energy bill/property tax receipt, if it's a residential property)
- The owner of the above-mentioned property has given his or her permission.
- 4 passport-sized pictures of potential Directors
The Procedure for Starting a Business:
- Registration of Digital Signatures
- Obtaining Director Identification Number (DIN)
- Name availing from the Registrar of Companies
- Drafting of Memorandum (MOA) and Articles (AOA) of Association.
- MOA and AOA filing
- Obtaining Certificate of Incorporation
Why register a Private Limited Company?
The following are some of the reasons to form a Private Limited Company:
- It is a well-known business entity in India.
- Best way to build an expandable business.
- It is simple to raise funds and obtain investments from angel investors, private equity investors, and venture capitalists.
- Because liabilities are limited, it can protect your personal assets.
- It improves brand recognition for promoters.
- Recommend for new and emerging businesses.