Private Limited Company Registration in India

A Private Limited Company is a closely held company registered under the Companies Act, 2013, with a maximum of 200 members (excluding employees), restricted share transfers per its Articles, and limited liability of shareholders. It exists as a separate legal entity distinct from owners, meaning it can own property, sue, and enter into contracts in its own name. The 'Private Limited' suffix indicates shares cannot be offered to the general public.

No, company registration is not legally mandatory for all businesses. You may operate as a sole proprietorship or partnership without ROC registration. However, registering a Private Limited Company provides limited liability protection, easier access to bank loans and investors, enhanced credibility with customers and suppliers, and eligibility for government tenders and Startup India benefits. The choice depends on business goals, funding requirements, and risk appetite.

CIN stands for Corporate Identification Number, a unique 21-digit alphanumeric code assigned by the ROC to every company incorporated in India. It contains encoded information, including listing status, industry code, state code, incorporation year, ownership type, and a unique serial number. This CIN appears on your Certificate of Incorporation and must be quoted on all company letterheads, invoices, official communications, and MCA filings.

Yes, the Companies Act, 2013, provides for conversion between different entity types. A Private Limited Company can convert to a Public Limited Company by altering the MOA/AOA and filing Form INC-27 under Section 14. It can convert to LLP under Chapter XXI by filing Form URC-1. Conversely, proprietorships, partnerships, and LLPs can convert to Private Limited Companies with specific eligibility criteria and procedures.

Authorised capital is the maximum share capital a company is legally authorised to issue, stated in the MOA under Section 4(1)(c). Paid-up capital is the actual amount received from shareholders for allotted shares. For example, a company may have ₹10 lakh authorised capital but only ₹5 lakh paid-up capital, allowing issuance of additional shares worth ₹5 lakh without amending the MOA. Government fees are calculated based on authorised capital.

A Private Limited Company is governed at multiple levels. Internally, the Board of Directors manages affairs and is accountable to shareholders. Externally, it is regulated by MCA through the ROC under the Companies Act, 2013 and related rules. SEBI has limited jurisdiction unless the company issues listed securities. Industry-specific regulators (RBI for finance, IRDAI for insurance) may also apply based on business activities.

A Private Limited Company requires a minimum of 2 directors and two shareholders under Section 3(1)(b) and Section 149(1). The same two individuals can serve as both directors and shareholders, allowing you to form a company with just two people. The maximum limit is 200 shareholders (excluding employee-shareholders) per Section 2(68) and 15 directors per Section 149(1), though the director limit can be increased via special resolution.

Yes, NRIs and foreign nationals can be directors and shareholders, subject to India's FDI policy under FEMA, 1999. The automatic route allows 100% FDI in most sectors without prior government approval. However, at least one director must be "Resident in India" under Section 149(3), meaning they have stayed in India for at least 182 days in the previous financial year. Foreign nationals from land border countries require prior MHA security clearance.

Yes, a salaried individual can become a director. No legal prohibition exists under the Companies Act, 2013. However, review your employment contract for non-compete clauses or conflict-of-interest provisions. Some employers require prior approval or disclosure of external directorships. Being a director involves fiduciary duties and potential personal liabilities under the Companies Act.

DIN (Director Identification Number) is a unique 8-digit identification number allotted by MCA under Section 153 to every individual intending to be a director. Yes, DIN is absolutely mandatory – no person can be appointed without a valid DIN. During incorporation via SPICe+, DIN can be obtained for up to 3 proposed directors. Existing directors use their existing DIN. A DIN remains valid for life unless surrendered or cancelled, and requires annual KYC through Form DIR-3 KYC.

The SPICe+ form allows DIN allotment for up to 3 directors at the time of incorporation. If your company has more than three proposed directors without existing DINs, incorporate with three directors initially. The remaining directors can apply for DINs separately using Form DIR-3 post-incorporation and be appointed to the board through Form DIR-12 after obtaining their DINs. This typically takes 3-5 additional working days.

Initial shares are allotted to subscribers as per the MOA at the time of incorporation. For post-incorporation allotments, the process involves board approval and the passage of a board resolution specifying the allottees, the number of shares, and the price. File Form PAS-3 (Return of Allotment) with ROC within 30 days per Section 39, and issue share certificates within 60 days per Section 46. Shares can be allotted at face value or at a premium, but never at a discount, per Section 53.

The typical timeline is 7-10 working days, assuming documents are in order and MCA functions normally. This includes 1-2 days for DSC procurement, 1-2 days for name approval via SPICe+ Part A, 2-3 days for SPICe+ Part B processing, and 1-2 days for certificate issuance. Delays can occur if documents are incomplete, the proposed name is rejected, resubmission is needed, or during peak filing periods.

Company registration follows six key steps: First, collect KYC documents and obtain a Class 3 DSC for all proposed directors. Second, reserve the company name via SPICe+ Part A after name and trademark searches. Third, draft the MOA and AOA based on business objectives. Fourth, file SPICe+ Part B with linked forms (e-MOA, e-AOA, AGILE-PRO-S). Fifth, upon ROC approval, receive the Certificate of Incorporation with CIN, PAN, and TAN—sixth, complete post-incorporation compliances, including INC-20A, bank account, and auditor appointment.

For Indian nationals: PAN Card (mandatory identity proof), Aadhaar Card (e-KYC and DSC OTP), recent passport-size photograph with white background, and address proof not older than 2 months (bank statement, electricity bill, or mobile postpaid bill). For NRI/foreign promoters: passport (notarised and apostilled), address proof from home country (apostilled), photograph, and, optional, a valid business visa for certain activities.

Provide a recent utility bill (electricity, water, or gas) or property tax receipt as address proof, not older than 2 months. Include ownership document (sale deed or property tax receipt if owned; rent agreement or lease deed if rented) and No-Objection Certificate from the property owner authorising use as registered office. The NOC should be on plain paper, signed by the owner, mentioning the company name and purpose.

Yes, residential premises are permitted under Section 12. Many startups begin from home addresses to save costs. If rented, obtain the landlord's NOC. If owned by a family member, they provide NOC. The registered office must be capable of receiving official communications and maintaining statutory records. You can later change to a commercial address by filing Form INC-22 within 30 days of the change.

The primary forms filed include: SPICe+ Part A (INC-32) for name reservation, SPICe+ Part B (INC-32) for incorporation details, e-MOA (INC-33) containing six mandatory MOA clauses, e-AOA (INC-34) with company governance rules, AGILE-PRO-S (INC-35) for EPFO/ESIC/GST/Bank Account/Profession Tax registrations, and INC-9 declaration by subscribers and directors. All forms are filed electronically on the MCA V3 portal.

Total cost comprises three components: Government Fees (MCA filing fees ₹0 for authorised capital up to ₹15 lakh, plus state-specific stamp duty ranging from ₹1,000-₹20,000+), DSC Charges (approximately ₹1,500-2,500 per director), and Professional Fees for expert assistance. At Setindiabiz, the professional fee starts at ₹3,499 with government fees and stamp duty charged at actuals. Use our Cost Calculator for an exact, all-inclusive quote.

Stamp duty is mandatory but collected within the MCA filing process as part of e-stamping for MOA, AOA, and SPICe+ forms—no physical stamp papers required. Stamp duty varies by state – Delhi charges approximately ₹100 per lakh of authorised capital, while Maharashtra has a different slab structure. The exact amount is calculated automatically during MCA filing based on the state and authorised capital.

At Setindiabiz, we ensure complete transparency. Quoted professional fee covers all services from DSC to COI delivery. Government fees and stamp duty are charged at actuals per MCA portal calculations. No hidden charges exist. Additional items that may be available include expedited DSC processing, additional directors beyond the standard package, premium name reservation, and post-incorporation services such as GST registration. All potential charges are communicated upfront.

Companies with authorised capital up to ₹15 lakh enjoy ₹0 MCA filing fees. Beyond this, fees apply as per Schedule I of the Companies (Registration Offices and Fees) Rules, 2014. For ₹15 lakh to ₹50 lakh, fees are nominal. Higher capital attracts proportionately higher fees and stamp duty. Starting with ₹1-10 lakh authorised capital keeps costs minimal while allowing flexibility to increase later via Board resolution and ROC filing.

Yes, stamp duty varies significantly by state under the Indian Stamp Act, 1899, as amended by respective State legislatures. For example, a company with ₹1 lakh authorised capital pays approximately ₹1,300 stamp duty in Maharashtra but only ₹300 in Delhi. States like Karnataka, Tamil Nadu, and West Bengal have their own rate structures. Check state-specific notifications before choosing a registered office location.

Under the Startup India initiative, DPIIT-recognised startups enjoy several fee concessions, including a rebate on patent filing fees, expedited patent examination, self-certification for labour and environment laws, and priority consideration for government procurement. MCA filing fees for companies with authorised capital up to ₹15 lakh are ₹ zero, regardless of startup status, benefiting all early-stage companies.

Within 30 days, appoint a Statutory Auditor and file Form ADT-1. Within 60 days, issue share certificates to all subscribers. Within 180 days, file Form INC-20A with a bank statement showing receipt of subscription money. Immediately after incorporation, open a bank account and hold the first board meeting. Missing deadlines attracts penalties, and INC-20A delay prevents the company from commencing business or borrowing.

Every Private Limited Company must file Form AOC-4 (financial statements) within 30 days of AGM under Section 137, and Form MGT-7A or MGT-7 (annual return) within 60 days of AGM under Section 92. All directors must file Form DIR-3 KYC annually before 30 September. Minimum four board meetings per year with a maximum 120-day gap, AGM within 6 months from the FY end, and income tax return before 31 October are mandatory.

Statutory audit by a practising Chartered Accountant is compulsory for every Private Limited Company, irrespective of turnover or size. This differs from LLPs, which have audit requirements based on thresholds. The first auditor must be appointed within 30 days of incorporation, per Section 139, ratified at the first AGM. An audit ensures financial transparency, compliance with accounting standards, and assures shareholders.

GST registration is not automatically mandatory. It becomes compulsory when annual aggregate turnover exceeds ₹40 lakh (₹20 lakh for special category states), when engaging in inter-state supply, when selling through e-commerce platforms, or making taxable supplies as an agent. Apply during incorporation through the AGILE-PRO-S form or separately later. Voluntary registration is possible to claim input tax credits.

Yes, if meeting DPIIT recognition criteria: incorporated for less than 10 years, annual turnover not exceeding ₹100 crore, working towards innovation/development/improvement, or having a scalable business model. Benefits include income tax exemption under Section 80-IAC (100% exemption for 3 out of the first 10 years), angel tax exemption under Section 56(2)(viib), self-certification, faster patent examination, and easier public procurement.

If a company doesn't commence business within one year, it may face strike-off proceedings under Section 248. ROC can remove the company name from the register. Section 10A requires filing INC-20A within 180 days – failure means the company cannot legally commence business or borrow. If not intending to operate immediately, apply for dormant status under Section 455, which reduces compliance requirements while keeping the company active.