Private Limited Company
Private Limited Company
The growth of trade and business led to many problems that traditional forms of business did not solve. For example, the unlimited liability feature of a sole proprietorship form of business resulted in people forming partnerships, but even that proved to be too inadequate and risky. This is when the concept of companies emerged, and private companies form of business is the oldest example of it.
Formation of Private Limited Company
Minimum 2 and maximum of 200 members can come together to form a private company by submitting an application to that effect to the Registrar of Companies along with a subscribed copy of their Memorandum of Association and other required documents after
payment of prescribed fees.
The Memorandum must state the name of the company (which should include the words “Private Limited”), the address of its registered office, its objects and purposes, and extent of liability of its members. It must also mention the details of subscribers to the Memorandum.
Apart from this, the Companies Act has also prescribed certain other compliances, such as requirements relating to names of private companies, their Articles of Association, details of members, transferability of shares, etc.
No need to prepare a report for annual general meetings.
Only 2 minimum directors required
They can adopt additional grounds for the disqualification of directors and vacation of their office.
They can pay greater remuneration to their directors than compared to some other types of companies.
1. Minimum 2 shareholders and directors (can be the same person)
2. Out of 2 directors atleast one should be resident in India
3. Minimum share capital of atleast 1,00,000
4. DIN (Director Identification Number) of all directors
5. DSC (Digital Signature Certificate) of all the directors and subscribers
PAN Card + Voter Identity Card/Passport/Driving License (of all directors and subscribers)
Aadhaar Card + Bank Statement, Electricity Bill, Telephone Bill, Mobile Bill (of all directors and subscribers)
PRE INCORPORATION COMPLIANCES:
1. DSC (Digital Signature Certificate) of all the directors and subscribers.
2. DIN (Director Identification Number) of all the directors
3. Incorporation Certificate
4. PAN and TAN
7. GST Certificate (if applied for)
POST INCORPORATION COMPLIANCES:
1. E-Form INC-20A
2. Holding of Board Meetings
3. Appointment of Auditor
4. Statutory Audit of Accounts
5. Maintenance of Statutory Registers
6. Filing of ROC Returns (Form AOC-4 and Form MGT-7)
7. Holding AGM (Annual General Meeting)
8. Preparation of director report
9. DIR-3 KYC (of all the directors)
a. It should not be identical with the name of the existing company.
b. Name should be unique.
c. The name should contain the object of the company.
d. One should follow the name approval guidelines as provided by the Government.