Private Limited Company

Is a Private Limited Company right for you?

A Private Limited Company is a separate legal entity: it owns its assets, signs contracts and can sue or be sued in its own name, and each shareholder’s liability is limited to any amount unpaid on their shares. It needs at least two directors — one of whom must be resident in India — and at least two shareholders; the same people can be both. It can have up to 200 members, and there is no minimum paid-up capital.

It suits businesses that plan to raise equity investment, offer employee stock options, or work with clients who prefer contracting with a company. The trade-off is more compliance than an LLP or a proprietorship: board meetings, a statutory audit every year, and annual filings with the Registrar of Companies whatever the turnover.

How incorporation works, step by step

• Digital Signature Certificates: each proposed director gets a Class 3 DSC, issued by a certifying authority after identity verification.
• Name reservation in SPICe+ Part A: we first search the MCA company and LLP database and the trademark registry, because names identical or too similar to existing companies or registered trademarks are rejected. An approved name is reserved for 20 days.
• SPICe+ Part B: the incorporation form — directors (a DIN is allotted here for up to three new directors), registered office, share capital and subscribers.
• e-MOA (INC-33) and e-AOA (INC-34): drafted around what your business actually does, because a vague or over-broad objects clause is a common reason for MCA queries.
• AGILE-PRO-S: the linked form for EPFO and ESIC registration, a bank account, and GSTIN if you want one at incorporation.
• Declarations and fees: director consents (DIR-2), subscriber and director declarations, MCA fees and state stamp duty, which depend on the authorised capital and the state.
• Approval: the MCA’s Central Registration Centre processes the application and, on approval, issues the Certificate of Incorporation with the CIN, company PAN and TAN.

Common reasons applications are held up — and how we avoid them

• Name objections — similarity to an existing company, LLP or trademark, or words that need prior approval (for example words suggesting government patronage, or regulated terms like “bank” or “insurance”). We search first and propose names with a clear rationale.
• Address proof issues — a utility bill older than two months, a different owner name, or a missing NOC. We check dates and names before anything is uploaded.
• Mismatched details — a name or date of birth that differs between a director’s PAN, Aadhaar and other KYC. We match every document before filing.
• Digital signature problems — an expired DSC, the wrong class, or a signer who doesn’t match the form. We set up DSCs and test signing first.
• Objects clause issues — activities that are vague, or that need separate approval (such as lending or insurance). We draft objects specific to your business.
• Missed resubmission windows — the MCA gives a limited time to respond to queries. We track every query and reply within it.

After incorporation: the first months

• Open a current account in the company’s name and have shareholders pay for their shares.
• Hold the first board meeting within 30 days of incorporation, and appoint the first auditor within the same 30 days.
• Issue share certificates within 60 days of incorporation.
• File the declaration for commencement of business (INC-20A) within 180 days of incorporation.
• Keep the statutory registers at the registered office, and show the company name and CIN outside the office and on letterheads and invoices.
• Register for GST, professional tax and the shops and establishments licence where your business needs them.
• Every year: director KYC (DIR-3 KYC), audited accounts, and the annual ROC filings (AOC-4 and MGT-7 / MGT-7A).