What is a Private Limited Company?
It is a type of Business Registration that offers limited liability to its shareholders. This is an excellent advantage as it immunizes the shareholders’ assets & limits their liability to the unpaid share capital.
But it also places some restrictions on the shareholders. Moreover, there should be a minimum of 2 & a maximum of 200 shareholders for creating a Private Limited Company.
It also enjoys the benefit of perpetual succession. This means, if any shareholder leaves the Company, the Business will go on as usual.
Is it suitable for Small Businesses?
Private Limited Registration can open the doors of multiple opportunities for the Business. By registering as a Private Limited Company, small Businesses can boost their credibility & scale-up their Business nationally & globally. As this form of registration is approved by MCA (Ministry of Corporate Affairs, it drives a lot of trust & credibility.
A Private Limited Company can help your Business stretch its wings & fly high!
This registration also makes the funding & loan approvals easy, giving your Business better room to grow.
But remember, every Business is different. So it is better to consult an expert before making any crucial decision.
Who is the Director of a Private Limited Company? Is there any special qualification required to become a director?
The Director is a critical position in a Private Limited Company. Their role can make or break the Business. E.g., any Managing Director is responsible for flawless Business operations & management of the firm.
There is no bar on the qualification to become a Director of a Private Limited Company.
He/she has to ensure that the Company is operating by staying compliant with the Government norm. In case of any fraudulent activity or the Managing Director will be held responsible.
What is DIN?
DIN refers to a Director Identification Number. This is a unique number allotted to the individual who intends to become the Director of any company. This DIN is valid for the life & the Director can use it for more than one Company. The DIN is issued by the MCA (Ministry of Corporate Affairs) on the Application.
To avail of the DIN, the individual will have to submit the Application and supporting documents & registration fees. Once the MCA finds all the Documents are correct, it will issue the DIN within 4 working days.
What is the Registered Office? Can it be changed later?
Every Private Limited Company must have a registered office. This is the place where all the documents & information of the Company are stored. It is also the place where the Company will hold its Annual General Meetings. The jurisdiction under which the Company will fall depends on the registered address. For e.g.if the registered Office of a Company is in Ahmadabad, it will fall under the Registrar of Company’s jurisdiction, Ahmadabad.
But no law mandates the Company to own the registered Office. The Company can own the registered Office, or it can also be a rented place.
In case if the Company wants to relocate its existing registered Office, it can be done at any time, easily. IT will have to submit the Application with other necessary documents to the MCA. The new address can be anywhere, whether in the same state or another; it doesn’t matter.
What are the primary benefits of a Private Limited Registration?
Let’s take a look at some of the primary benefits of a Private Limited Registration:
- Limits the liability of the Shareholders
- Drives more credibility in the market, helping you get more Business.
- It enjoys a separate legal existence. This means a Private Limited Company can have assets in its own name.
- It enjoys the benefit of Perpetual Succession. So even in case of the Director’s death, the Business operations of the Company will continue as usual.
- Trusted by Banks, NBFCs & other financial institutes for easy funding.
- A great option if you are involved in the Import/Export Business.
How can I establish a Private Limited Company?
To establish a Private Limited Company, you will have to follow these 3 simple steps:
- Select 1 or more individuals who will serve as the Shareholders in your firm along with you. You will also have to select one or more managing directors who will manage all the business operations.
Any shareholder can become the Director with the approval of the Shareholders.
- Submit all the necessary documents to the Registrar of Company, including Memorandum of Association (MOA), Article of Association (AOA), Application for the Company’s name, Director Identification Number, & proof of Registered office address.
- You will also need the Minimum Capital Amount that can be used for any Business-related expenses.
The process of Company registration is not as simple as it seems. You’ll need a lot of additional documents, will have to ensure all are in correct order & other formalities are fulfilled.
This can take up a lot of your precious time, delaying the registration process.
So You can do it yourself, or there is even a better option!
Get in touch with us, & will manage everything necessary to establish a Private Limited Company.
All you will have to do is sit back & relax while our experts will do all the hard work.
Global Consulting Group is a leading Taxation, Accounting, and Compliance firm that helps individuals, MSMEs, and other businesses manage their accounting, taxation regulatory compliance affordably.