Private Limited Company

In India, company registration can be completed online through Tracequality. A private limited company is the most common type of legal entity that is preferred by millions of Indian Entrepreneurs and popular startups like Flipkart, PhonePe, and Swiggy. A private limited company can be registered online in less than 10 days at a very affordable price of just Rs. 7899.

What is a Private Limited Company?

A Private Limited Company (PLC) is one of the most common types of legal entity in India. Private Limited Companies are governed by the Companies Act, 2013 and require a minimum of 2 Directors and 2 Shareholders with one of the Directors being an Indian Resident and Indian Citizen.


Advantages of Proprietorship

To register a company in India, the following are the minimum requirements:

  • 2 Directors – 1 Person should be an Indian National and Indian Resident
  • 2 Shareholders – The Directors can be shareholders
  • Registered Office in India

100% Foreign Direct Ownership (FDI) is permitted in most sectors in India and there is no restriction on foreign shareholding of a private limited company. Hence, most foreign subsidiaries are established in India as private limited companies.

Documents Required for Company Registration

The proposed directors of a private limited company must present the following documents as proof of identification to register a company:

Indian Nationals: PAN card mandatory

Foreign Nationals: Passport is mandatory

In addition to the above document, the Directors must submit one of the following documents that contain the address of the Director.

Indian Nationals: Passport / Driver’s License / Election ID / Ration Card / Aadhar ID

Foreign Nationals: Drivers License / Bank Statement / Residence Card

Finally, as proof of residency, the prospective Directors must produce one of the following documents. This document must have been generated within the last two months:

Indian Nationals: Bank Statement / Electricity Bill / Phone Bill

Foreign Nationals: Bank Statement / Electricity Bill / Phone Bill


If one of the company’s shareholders is a company based in India or abroad, the following documents must be submitted:

  • Board resolution authorizing investment in the company
  • Incorporation Certificate of the Company
  • Address proof of the company


Capital Required to Start a Company

A company can be started in India with a very minimum amount of capital. There is no fixed amount and the shareholders of the company being incorporated can determine the capital they wish to contribute. While setting up the capital structure of the company, the following are some of the concepts to be kept in mind:

Face Value of Share: The face value of a share is the price per share with which the company is incorporated. Normally, the face value of a share is Rs. 1 or Rs. 10, or Rs. 100 or Rs. 1000 or Rs. 10,000.

Authorized Capital: Authorised capital is the total value of shares a company can issue to shareholders. Normally, all companies are incorporated with an authorized capital of Rs. 1 lakh or Rs. 10 lakhs. If a higher authorized capital is required, the company would be required to pay additional fees to the Ministry of Corporate Affairs. The authorized capital of a company can be increased at any time after incorporation.


Paid-up Capital: Paid-up capital of a company is the number of shares issued to shareholders for which they have paid or deposited money to the company. The Paid-up capital of a company cannot be more than the authorized share capital of the company.


Company Registration Process


The following are the steps involved in registering a company in India:


Step 1: RUN Name Approval

An application for company name approval is first submitted to the Ministry of Corporate Affairs to reserve the company name. In the name approval application, 1 or 2 names with business objectives can be submitted. If a name approval is rejected, 1 or 2 more names can be resubmitted. Normally, the MCA approves all name approval applications in less than 5 working days.


Step 2: Digital Signature for Directors

In India, the Ministry of Corporate Affairs does not allow wet signatures. All signatures for filings with the MCA must be completed with a digital signature that is issued by a Certification Authority in India. Hence, digital signatures are mandatorily required for the Directors before incorporation.


Digital signatures for the Directors will be obtained through an Authorized Certifying Authority by Tracequality. To obtain Digital Signature, the Directors will have to submit a copy of their identity proof and complete a video KYC process. If the Director is a foreign national, the passport and other documents submitted must be apostilled by a local embassy.


Step 3: Incorporation Application Submission

Once the digital signatures are obtained, the incorporation application can be filed in SPICe Form to the MCA with all relevant attachments. Along with the incorporation application, the Memorandum of Association (MOA) and Articles of Association (AOA) of the company are filed. If the MCA finds the incorporation application to be complete and acceptable, the Incorporation Certificate is granted along with the PAN of the company. The MCA normally accepts all incorporation applications in less than 5 working days.

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