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Private Limited Company



Introduction:
While starting up a company one has to decide which business organization they want to incorporate and carry on. The choice of business organization is very important to give shape to your business motive. And Private limited Company is the first choice of most of the business persons including foreigners as well.
Private company are those companies where all the shares of the company are held privately. They can operate their business themselves or hire directors to manage the company on their behalf. It is a business entity which is privately held by some shareholders. It limits the owner liability to the extent of their shareholding and limits the number of shareholders to 200 only. It also restricts shareholders to trade shares publically.
Advantages of Private Limited Company:
·         The liability of the shareholders is limited to the extent of their shareholding. Their personal assets are not taken to repay the debts of the company.  
·         There is restriction on Transfer/trade of shares. It is an advantage to the shareholders who do not want to sell the shares to the outsiders.
·         It has perpetual succession and has an independent identity which is different from its owners or shareholders. It means that the company will still and continue to exist even if the members die or ceases to be a member. The change in shareholders will not bring any effect on the identity of the company. It will continue to exist till its wound up.
·         It is a Separate legal entity. It has its own assets and liability. It is capable of owing the funds and other properties. It is a legal person under whose name the company’s property is vested and is not of the shareholders.
·         A company being a legal entity has the power to sue in its name and can be sued by others.

A Private Limited has the following features (Section 2(68) of the Companies Act, 2013):
(i)     Shareholder’s right to transfer its shares is restricted.
(ii)    the number of shareholders is limited to 200; and
(iii)   An invitation to the public to subscribe to any shares or debentures is prohibited.

Requirements for a Private Limited Company
1.       Name of Company: This must be followed by the word “Private Limited’. The name should not be identical (or very similar to) the name of an existing company. It won't be considered if it is offensive or illegal and the use of certain words in a company (for example, `Foundation, Institute, Trust, National, etc.) can only be used in certain circumstances with the prior approval of the Central Government.
2.       Registered Office address: This is the address where all official correspondence will go.
3.       Directors: The Company must have at least 2 directors and one of them must be resident of India.
4.       Shareholders/Members: There must be a minimum of two shareholders (also described as `members' or `subscribers'). A private company can have up to 200 shareholders.
5.       Authorized Share Capital: The Company must be formed with a nominal share capital.
6.       Paid up Capital: The capital that will be subscribed by the first subscribers.
7.       Motive/Object: The Company must have a valid object or business activity.
8.       Memorandum of Association: The memorandum is the company's charter. It states the company's name; the situation of its registered office; its share capital; the fact that liability is limited and, most importantly, the object for which the company has been formed.
9.       Articles of Association: AOA contains the internal regulations of the company, the relationship of the company to its shareholders and the relationship between the individual shareholders.
10.   Digital Signature Certificate (DSC): Directors for an Indian company, both Indian and foreigners, are required to get Digital Signature Certificate (DSC). Digital Signature Certificate (DSC) is required for all Directors or authorized representatives of any company and professional who will require to sign ROC forms or documents.
11.   Certificate of Incorporation: This is the document, which the registrar of companies issues once he has approved your choice of name and your memorandum. When you receive this document your company legally exists.
12.   Statutory Auditors: Every company must appoint a qualified auditor.
13.   Registers: In addition to the accounts books, companies are required to have a register of members and share ledger; a register of directors and secretaries; a register of share transfers; a register of charges; a register of debenture holders, etc.


PROCESS OF INCORPORATION OF PRIVATE LIMITED COMPANY:

{In pursuance of sections 4, 7, 12, 152 and 153 of the Companies Act, 2013 read with rules made thereunder}

E-Form SPICe (INC-32) deals with the single application for reservation of name, incorporation of a new company and/or application for allotment of DIN and/or application for PAN and TAN.

This e-Form is accompanied by supporting documents including details of Directors & subscribers, MoA and AoA etc. Once the e-Form is processed and found complete, company would be registered and CIN would be allocated. Also DINs gets issued to the proposed Directors who do not have a valid DIN.

Maximum three Directors are allowed for using this integrated form for filing application of allotment of DIN while incorporating a company. Also PAN and TAN would get issued to the Company.

Process:

1.       Reservation of Name: An application for reservation of name shall be made through web service by using RUN (Reserve Unique Name). Only two names can be applied and one resubmission is allowed. Name will be reserve for a period of 20 days from the date of approval.

2.       After approval of name, an application for registration of the company shall be filed in e-form INC-32 (SPICe) along with the following details and documents:

                                                               i.      Memorandum of association or SPICe-MOA (INC- 33)
                                                             ii.      Article of association or SPICe-AOA (INC- 34)
                                                            iii.      Affidavit and Declaration by First Subscribers and Directors
                                                           iv.      Registered office address proof
                                                             v.      NOC from Owner
                                                           vi.      Copy of Certificate of Incorporation of the Foreign body corporate and Resolution passed if the subscriber to the proposed company is Foreign Company
                                                          vii.      Proof of Identity and residential address of the Subscribers and Directors
                                                        viii.      Consent to act as director
                                                           ix.      Interest of first Directors in other Entities

3.       After approval of the form SPICe, the Registrar of Companies shall register the company and issue the Certificate of incorporation in form INC-11.



Contact Details:

VISHAL SHARMA
Company Secretary
Mob: 9716763754



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http://csvishalsharma.blogspot.in/

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Disclaimer: The Content is prepared on the basis of our general understanding and on the basis of relevant provision of Companies Act, 2013 read with rules made there under. The whole content is only for the knowledge sharing purpose, we do not take any responsibility for the correctness of the same. 



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