Enrolling a company is quite simple nowadays. The ministry of corporate affairs (MCA) has introduced an online portal for company registration. But before thinking about registering a company it is necessary for you to choose the right company structure for your business as it will help you do business efficiently and achieve your goals. In India, every business must register itself as a part of mandatory legal compliance.
Before learning to register a company let’s understand the various types of business structures in India.
It is the best way to start a company having only one owner. It allows the sole proprietor to carry on his work without giving up their corporate work.
It is a voluntary association of members incorporated under the company’s act. This company has a separate legal existence and the liability of its members is limited. That offers shares to general public for raising capital.
As the name suggests it is a privately owned business entity. It consists of stakeholders and a board of directors. The liability of the members of a Pvt ltd company is limited to the number of shares held by them.
According to sec 2 (68) of the companies act, 2013 the definition of a private limited company is given as:
A company must have a minimum paid-up share capital as prescribed and which by its articles
Like any other business structure, a minimum of 2 shareholders or directors is a must to start such a type of company. The maximum cap for a number of members is 200 so that it is not restricted to a small entity only.
The liability of the members in a company is limited to the total shares contributed by them. But the personal assets of the shareholders aren’t at risk.
This is a separate legal entity. That means if all members of the entity die or if the business becomes bankrupt, the company will still exist in the eyes of law. The life of the company will not be affected until dissolved by way of dissolution.
As per MCA, the minimum paid-up capital for a private limited company is 1 lakh. But as per the company amendment act, 2015 government has relaxed the minimum requirement for paid-up capital. Therefore, there is now no requirement for any minimum capital to be invested to start a private limited company. However, it is subject to change from time to time as prescribed by MCA.
Vendors and suppliers trust a registered Pvt ltd company over a non-registered company. And information regarding the registered companies can be obtained from the MOA website.
It is quite easy to transfer equity to new members and issue shares to them.
Startup companies can easily raise from the market on an equity basis.
In order to register a private limited company a minimum of two persons are required who must act as shareholders or directors. A company can have a maximum of 200 shareholders and 15 directors.
As per the company’s amendment act, 2015 there is no minimum paid up capital required for incorporating a private ltd company.
The selected name for your company has to be unique; the suggested name should not match any other company. And the name must not go against the copyrights act or trademarks law.
The registered office place need not be necessarily commercial. A rented house can also be registered as an office after getting NOC from the landlord.
The process of registration for Pvt ltd is completely online. So, you don’t have to visit any office personally. We at taxpotter help you completely in company registration.
The first step for registering Pvt ltd company is applying for a digital signature certificate with the ministry of corporate affairs. It is an electronic legal document used for the verification of information.
The next crucial step is the application director identification number. This is needed to check whether all compliances have been met while recruiting the directors
The applicant has to file these two documents online. These documents ensure the legal certainty of company formation. This process has to be carried out through the MCA portal.
An applicant has to file at least 3 unique names for a company out of which one will be selected.
Before suggesting the names you need to check the availability of names from the MCA portal.
After all filings apply for PAN and TAN and then open a bank account by submitting them.
After reviewing the application by MCA the applicant will be granted a certificate of incorporation.
It is a legal document that provides legal status to your company
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