Free Consultation by Expert

Many thanks to Setbharatbiz. We had an excellent experience working with its expert. They have a strong sense of professionalism when dealing with clients.

Mudassir CEO, Twinfinty DigiTech Solutions

We would recommend Setbharatbiz incorporation services to any founder without a second doubt. The process was beyond efficient and shows Setbharatbiz founder's vision

Nagasrinivas Director,Prakash Nagasrinivas & Saradhy Associates

I was searching for a company for assistance in the incorporation services. Then one of my friend tell me about Setbharatbiz and definitely the Setbharatbiz is the best.

Prakash Kakani Director, PNS EV Hub

Overview

Private Limited Company in India

A Private Limited Company (Pvt Ltd) is one of India’s preferred business structures, especially among startups, small, and medium enterprises. Governed by the Companies Act, 2013, it provides limited liability to its shareholders, ensuring that personal assets are safeguarded in the event of financial distress. It operates as a separate legal entity, allowing it to hold property, incur debt, and enter into contracts independently of its owners. This structure enhances business credibility, which is beneficial for engaging with clients, suppliers, and investors. Additionally, a Private Limited Company enjoys perpetual succession, meaning it continues to operate regardless of changes in ownership.

Why Registration is Important

  1. Asset Protection : Limits shareholders' liability to their shares, protecting personal assets.
  2. Credibility : Enhances trust with clients and investors due to structured compliance.
  3. Continuity : Ensures business continuity through perpetual succession.
  4. Fundraising Potential : Simplifies capital raising through private placements
  5. Compliance Benefits : Facilitates ease of business operations through structured regulatory frameworks.

Documents Required

To register a Private Limited Company in India, the following documents are generally required:

For Indian Nationals

For Foreign Nationals



Procedures

The process to incorporate a Private Limited Company in India involves the following steps:

  • DSC
    Obtain Digital Signature Certificate
    All directors must obtain a DSC, which is used to sign documents electronically.
  • DIN
    Obtain Director Identification Number
    Apply for DIN for all proposed directors by submitting the required documents.
  • Name Reservation
    Name Reservation
    File the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) Part A form to reserve a unique name for the company.
  • Incorporation Filing
    Incorporation Filing
    Complete SPICe+ Part B for company incorporation, including details of the company's directors, shareholders, and registered office.
  • MOA & AOA
    Drafting of MOA and AOA
    The Memorandum of Association (MOA) and Articles of Association (AOA) need to be drafted and submitted as part of the incorporation process.
  • Certificate of Incorporation
    Obtain Certificate of Incorporation
    Once all the documents are verified, the Registrar of Companies (ROC) issues the Certificate of Incorporation.
  • PAN & TAN
    PAN and TAN Application
    The company automatically gets its PAN and TAN along with the Certificate of Incorporation.
  • Bank Account
    Bank Account Opening
    With the Certificate of Incorporation, the company can open a bank account in its name to commence operations.


Features

Features & Benefits of Private Limited Company in India

Separate Legal Entity
The company operates independently of its shareholders.
Prev Next
Limited Liability
Shareholders' liability is limited to the unpaid amount on their shares.
Prev Next
Perpetual Succession
The company's existence is not affected by the change in ownership.
Prev Next
Restricted Share Transferability
Shares can be transferred only with the consent of the other shareholders.
Prev Next
Minimum and Maximum Shareholders
Minimum of 2 and a maximum of 200 shareholders.
Prev Next

Private Limited Company In India

Compliance Requirements
Higher compliance standards compared to partnership or sole proprietorship.
Prev Next
Ease of Raising Capital
Can raise capital through private placement, rights issue, etc.
Prev Next
Credibility
Seen as a more credible and structured form of business, often preferred by investors and financial institutions.
Prev Next
Tax Benefits
Eligible for various deductions and lower tax rates compared to other forms of business.
Prev Next
Ability to Offer Employee Benefits
Private limited companies can offer a range of employee benefits such as stock options, bonuses, and retirement plans.
Prev Next


Comparison between Private Limited Company, LLP And One Person Company

Features Private Limited Company LLP One Person Company (OPC)
Legal Status Separate Legal Entity Separate Legal Entity Separate Legal Entity
Liability Limited to shares Limited to the contribution Limited to shares
Number of Owners 2-200 (Shareholders) Minimum 2 Partners, No Maximum Only 1 Shareholder
Transfer of Shares Restricted Cannot be easily transferred Not applicable
Compliance Requirements High Moderate Moderate
Fundraising Capability Easier (Private Placement) Limited Limited
Management Structure Board of Directors Designated Partners Sole Shareholder
Perpetual Succession Yes Yes Yes
Audit Requirement Mandatory Conditional Conditional


Frequently Asked Questions

What is the minimum capital required to start a Private Limited Company?

There is no minimum capital requirement to start a Private Limited Company in India.

Can a Private Limited Company be converted into a Public Limited Company?

Yes, a Private Limited Company can be converted into a Public Limited Company by following the prescribed legal process.

What is the difference between a Private Limited Company and an LLP?

The key difference lies in the ownership structure and compliance requirements. A Private Limited Company has shareholders and requires more compliance, while an LLP has partners with lower compliance requirements.

Is it mandatory to have a company secretary for a Private Limited Company?

A company secretary is mandatory only if the company has a paid-up capital of ₹10 crore or more.

Can a Private Limited Company issue debentures?

Yes, a Private Limited Company can issue debentures to raise capital.

What are the annual compliance requirements for a Private Limited Company?

A Private Limited Company must file annual returns, financial statements, and hold annual general meetings. Additionally, income tax returns and other statutory filings must be completed annually.

Overview

Private Limited Company in India

A Private Limited Company (Pvt Ltd) is one of India’s preferred business structures, especially among startups, small, and medium enterprises. Governed by the Companies Act, 2013, it provides limited liability to its shareholders, ensuring that personal assets are safeguarded in the event of financial distress. It operates as a separate legal entity, allowing it to hold property, incur debt, and enter into contracts independently of its owners. This structure enhances business credibility, which is beneficial for engaging with clients, suppliers, and investors. Additionally, a Private Limited Company enjoys perpetual succession, meaning it continues to operate regardless of changes in ownership.

  1. Asset Protection : Limits shareholders' liability to their shares, protecting personal assets.
  2. Credibility : Enhances trust with clients and investors due to structured compliance.
  3. Continuity : Ensures business continuity through perpetual succession.
  4. Fundraising Potential : Simplifies capital raising through private placements
  5. Compliance Benefits : Facilitates ease of business operations through structured regulatory frameworks.

Documents Required

To register a Private Limited Company in India, the following documents are generally required:

For Indian Nationals

For Foreign Nationals


Procedures

  • DSC
    Obtain Digital Signature Certificate
    All directors must obtain a DSC, which is used to sign documents electronically.
  • DIN
    Obtain Director Identification Number
    Apply for DIN for all proposed directors by submitting the required documents.
  • Name Reservation
    Name Reservation
    File the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) Part A form to reserve a unique name for the company.
  • Incorporation Filing
    Incorporation Filing
    Complete SPICe+ Part B for company incorporation, including details of the company's directors, shareholders, and registered office.
  • MOA & AOA
    Drafting of MOA and AOA
    The Memorandum of Association (MOA) and Articles of Association (AOA) need to be drafted and submitted as part of the incorporation process.
  • Certificate of Incorporation
    Obtain Certificate of Incorporation
    Once all the documents are verified, the Registrar of Companies (ROC) issues the Certificate of Incorporation.
  • PAN & TAN
    PAN and TAN Application
    The company automatically gets its PAN and TAN along with the Certificate of Incorporation.
  • Bank Account
    Bank Account Opening
    With the Certificate of Incorporation, the company can open a bank account in its name to commence operations.

Features

Features & Benefits of Private Limited Company in India

Separate Legal Entity

The company operates independently of its shareholders.

Limited Liability

Shareholders' liability is limited to the unpaid amount on their shares.

Perpetual Succession

The company's existence is not affected by the change in ownership.

Restricted Share Transferability

Shares can be transferred only with the consent of the other shareholders.

Minimum and Maximum Shareholders

Minimum of 2 and a maximum of 200 shareholders.

Compliance Requirements

Higher compliance standards compared to partnership or sole proprietorship.

Ease of Raising Capital

Can raise capital through private placement, rights issue, etc.

Ability to Offer Employee Benefits

Private limited companies can offer a range of employee benefits such as stock options, bonuses, and retirement plans.

Comparison between Private Limited Company, LLP And One Person Company

Features Private Limited Company LLP One Person Company (OPC)
Legal Status Separate Legal Entity Separate Legal Entity Separate Legal Entity
Liability Limited to shares Limited to the contribution Limited to shares
Number of Owners 2-200 (Shareholders) Minimum 2 Partners, No Maximum Only 1 Shareholder
Transfer of Shares Restricted Cannot be easily transferred Not applicable
Compliance Requirements High Moderate Moderate
Fundraising Capability Easier (Private Placement) Limited Limited
Management Structure Board of Directors Designated Partners Sole Shareholder
Perpetual Succession Yes Yes Yes
Audit Requirement Mandatory Conditional Conditional

Frequently Asked Questions

What is the minimum capital required to start a Private Limited Company?

There is no minimum capital requirement to start a Private Limited Company in India.

Can a Private Limited Company be converted into a Public Limited Company?

Yes, a Private Limited Company can be converted into a Public Limited Company by following the prescribed legal process.

What is the difference between a Private Limited Company and an LLP?

The key difference lies in the ownership structure and compliance requirements. A Private Limited Company has shareholders and requires more compliance, while an LLP has partners with lower compliance requirements.

Is it mandatory to have a company secretary for a Private Limited Company?

A company secretary is mandatory only if the company has a paid-up capital of ₹10 crore or more.

Can a Private Limited Company issue debentures?

Yes, a Private Limited Company can issue debentures to raise capital.

What are the annual compliance requirements for a Private Limited Company?

A Private Limited Company must file annual returns, financial statements, and hold annual general meetings. Additionally, income tax returns and other statutory filings must be completed annually.

Related Services