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Private Limited Company Registration
Register your new startup as a Pvt ltd company with ✓Two DSC & DIN ✓Name Approval ✓COI ✓MOA ✓AOA ✓PAN ✓TAN & Bank A/c Opening Support. 100% Online Order & Documentation, Chat with the startup specialist to get started

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Register Your Company With Setindiabiz!

pvt ltd company registration Expert Advice and Superb Service

Expert Advice
and Superb Service

pvt ltd company registration Drafting of MOA & AOA

Drafting of
MOA & AOA

pvt ltd company registration ePAN and TAN Number

Company ePAN
and TAN Number

pvt ltd company registration DIN and DSC <br>for Directors

DIN and DSC
for Directors

pvt ltd company registration Transparent Pricing, Pay Govt Fee on Actual

Transparent Pricing,
Pay Govt Fee on Actual

Company Registration Certificate from MCA

Company Registration
Certificate from MCA

Request Quotation/Call Back From Startup Specialist

Request Quotation/Call Back
From Startup Specialist

Most Important Reads on Pvt. Ltd. Company Registration

Documents Required for Company Registration

Documents Required for Company Registration

Form 8 of LLP

Photograph

Latest Passport size Color photograph of all the promoters (Shareholders and Directors)

Registered office Proof

Registered office Proof

Latest & Clear Telephone Bill/Electricity Bill/ /Water/Gas Bill of the registered office address

Pan Card

Pan Card

PAN Card of all shareholders and Directors. Foreign nationals must provide a valid passport.

Identity Proof

Identity Proof

Any of the following ID: Passport, Voter ID/Driving License of Shareholders and Directors.

Address Proof

Address Proof

Latest Bank Statement/Telephone Bill/Electricity or Gas Bill/Water Bill of Shareholders and Directors

Get Registered in 4 Steps

Select Service

Step 1step1

Select Service

Select the desired
service you want to avail

Pay Fee

Step 2step

Pay Fee

Pay the mentioned amount
for the respective service

Send Documents

Step 3step 3

Send Documents

Email of upload the relevent
documents for the service.

Get it done

Step 4step 4

Get it done

Now get registered and
enjoy our service

Company Registration @ ₹ 2,999

ROC Fee, Stamp Duty & GST on Actual Basis | All India Service

Process & Frequently Asked Questions

Step-1:
Documentation for Company Registration - Day - 1

Documentation plays a significant role in the Registration of companies in India. The primary documents of all shareholders and director s such as PAN, ID, and address proof are submitted along with evidence of the registered address of the Company. For the registered address, utility bills like electricity bill, water bill, or telephone bill of the registered address along with a NOC from the owner of premises are filed. The list of documents required is provided above for your reference. We shall request the necessary information for Company Registration in the Questionnaire Company Registration Questionnaire.

Step-2:
Select Name of New Private Limited Company Registration - Day - 1

The name of every Company should be unique and must not violate the name of any other company or someone else trademark. We assist you by conducting a detailed search in the MCA and Trademark database for a possible match of the name. Please refer to our detailed discussion on name approval guidelines for company registration name approval guidelines for company registration.

Step-3:
DSC for All Promoters of The Company - Day - 1

DSC is equivalent to the physical or paper signature under the information technology act. For Registration of a Company, all the applications to ROC are filed in digital format signed by its proposed director. The filing process for Company Registration starts with the issue of a digital signature for the shareholder and director of the Company.

Step-4:
Name Approval for Company Registration - Day - 2-5

RUN is the name of an online application, which is to be used for making an application for seeking approval of the ROC for the proposed Name of the Company. The RUN application can be filed with two proposed names of the company, in order of preference, can be filed with a note on the significance of the name and the business activities.

Step-5:
Spice Form Filing to ROC for Company Incorporation - Day - 5

After name approval of the company, we need to file the formal application for incorporation of the Company in form SPICE to the ROC with appropriate documents as attachments. The documents to be attached with Spice Form are MOA, AOA of the Company, KYC documents of promoters, and proof of the registered address with NOC from the landlord. The DSC of the promoters is then used to sign the application, which is further attested by one practicing Chartered Accountant, Company Secretary, Cost Accountant, or an Advocate practicing at High Court. The government filing fee for Company Registration depends on the proposed capital of the Company.

Step-6:
Registration of The Company with ROC - Day - 7

The final stage for the Company registration is the Issue of Certificate of Incorporation of the Company after the verification of the application for Company Registration is filed in Spice Form. The issue of the registration certificate of the company is conclusive proof of the Registration of the Company by ROC.

Step-7:
PAN & TAN Number for the Company - Day - 7

Nowadays, the issue of Pan Number and TAN is done automatically at the time of incorporation of the Company. There is no need to make any separate application. The PAN Number and TAN comes printed on the certificate of incorporation itself, and after the Registration of the Company, E-Pan and Tan letter is sent via email.

1.
Do I have to be present in-person for the registration of my company?

Not at all. The incorporation of the company is an online process. The documentation and the filing process with the ROC can be done in an online environment. Hence there is no need for a physical visit to our offices

2.
Do I need a full-time CA for Company Registration?

Hiring a personal CA or CS may be costlier for a startup. Considering this difficulty, we offer an alternative to you to get the company registered from us on an online professional service platform.

3.
How the certificate of incorporation will e provided?

Company incorporation certificate is provided as a pdf document by the Ministry of Corporate Affairs (MCA). MCA only provides a soft copy of the incorporation certificate.

4.
How do I open a Bank Account for my Company?

To open the Bank Account of the Company, we shall be giving you all the documents. You need to submit the Certificate of Incorporation. The Bankers seek a copy of MOA & AOA, Copy of ePan and the KYC document of the directors. They also insist on the proof of the registered address and the board resolution. We would support you for the opening of the Bank Account of your Company.

1.
Is it possible to register a company online?

Yes, the application for registration of the company is digitally filed to the Ministry of Corporate Affairs at MCA Portal, the Pvt ltd company registration fee is also payable online to the ROC. The memorandum and articles of the company are filed in digital format as an attachment to the Spice Form for registration of a private limited company in India. After the registration of the company, Pan card is allotted by the income tax department. Hence we can say yes to 100% online process of company registration.

2.
What are the laws and regulations relating to the protection of brands etc. in India?

India being a signatory of WTO, have a similar regulatory framework for the protection of the trademark in India. The first step to protect the Brand, Logo, Trademark, etc.; is to apply for trademark registration. Click here laws and regulations relating to the protection of brands to learn more.

3.
What is the method for company registration number check?

The company registration number is also known as a corporate identification number (CIN), and the same can be verified at Company Master data on the MCA portal.

4.
A company is a separate distinct legal entity, what does it mean?

A legal entity like a company has a separate identity from its owners or shareholders. With the registration of the company according to the law in force, it becomes a distinct legal entity which is different from its promoters and is treated separately under the law.

5.
What is the borrowing capacity of a company?

Not only the private limited companies receive great financial assistance from banks and financial institutions but also enjoy the advantage of borrowing funds. A private limited company can also issue debentures apart from accepting deposits from the public.

6.
What is the minimum capital required to register a Private Limited Company?

There is no minimum minimum required for starting a private limited company. You can fix any capital as per the requirement of your business.

7.
What do you mean by authorised capital and paid-up capital?

The authorised capital is mentioned in the last clause of the MOA and sets a limit up to which the company can raise its capital. The paid-up capital, on the other hand, the paid capital of the company. Please refer to our detailed analysis of capital.

8.
Is GST registration mandatory at the early stage of business?

GST Registration is required if the turnover of the business crosses the threshold limit or when the company does an inter-state supply. Please review your situation and decide for yourself if you need GST Registration or nor. Please note once registration under GST is obtained filing of regular returns is mandatory. Click to Learn more on GST Registration

9.
Is It Mandatory To Deposit the Equity Share Capital At The Time Of Company Incorporation?

NO the at the time of registration there is no provision for depositing anything as such. However, after the incorporation of the company, the shareholders need to transfer the subscribed share capital to the company bank account.

10.
Is It Possible For Private Limited Company To Trade Shares?

No, a private limited company is not allowed to offer shares to the public at large, and there is a complete restriction on public trading as such.

11.
Can a Private Company carry multiple businesses?

Yes, a company can carry multiple business activities if it is mentioned in the company's MoA and approved by the ROC. Please note that more than one business activities can be mentioned in the main object of the MOA provided they are related in nature. Completely unrelated business can't be done in the same company; for example, construction and healthcare shall not be allowed to be carried in the one and same company.

12.
What are the applicable tax rates for a domestic company ?

The applicable tax rate for a company depends on various factors. In the below table the same is summarised.

13.
What is the name approval?

The name approval concerning a Company Registration means the process through which the registrar of companies approves a particular name for the proposed Company in compliance with the law. To seek the name approval, the promoter of the Company has to apply the RUN form at the website of the MCA. The government fee for seeking name reservation/approval is Rs 1000 in case of Company and Rs 200 for the LLP.

14.
How can I name my Company?

The name of a Private Limited Company always ends with two words "Private Limited". The first part of your name should consist of a coined term, and the middle part should reflect the main business activity that the proposed Company is planning to take up.

15.
Can we use Pvt Ltd instead of private limited?

No. the correct name of Company ends with words Private Limited, any short form like Pvt Ltd, or use of P. Ltd, in the end, is illegal and contrary to the provisions of the Companies Act, 2013.

1.
What is Digital Signature (DSC)?

The digital signature is an equivalent of a physical signature in the form of an encrypted device. As the application for registration of the company is filed in online mode, hence all the directors and shareholders need to have the digital signature issued.

2.
What is director identification number (DIN)?

The director identification number is a unique identifier assigned to the director by the ROC operating under the ministry of corporate affairs. The DIN is a permanent number and is allotted during the course of processing the spice form before the generation of the company registration certificate. The DIN remains valid throughout India, however, you need to file directors KYC every year.

3.
Is it necessary to have two directors for Company Registration?

Yes, for a company, the minimum number of directors prescribed is 2, and the maximum is 15. In case you are the sole owner you should consider incorporating a One Person Company or Proprietorship Firm

4.
Can a Salaried person become the director of a company?

Yes, there is no restriction under the companies act that restrict a persons ability to become a director in a company if he is a salaried employee somewhere else. However, you should check your appointment documents for any restriction that may have been imposed by your employer.

5.
Can NRIs or a Foreign National become Director in a Private Limited Company?

Yes, the foreign nationals of a non-resident Indian can b=very well become a director in the company. However, out of all the directors of the company, one director must be a resident in India.

6.
Can a family member become co-founder or director of the company?

Yes, there is no restriction. A family member such as wife, brother, father, mother, sister etc. can become a co-founder or another director of the company.

7.
. What Is The Qualification For An Individual To Be A Shareholder Or Director Of A PVT. LTD. Company?

There is no mandatory qualification for an individual to be a shareholder or director of a PVT. LTD. Company and any individual can become a shareholder or a director.

8.
Who can become a Designated Partner?

While any person can become a partner in the LLP, but only an individual can be appointed as the designated person. In some cases, the designated partner is a nominee of a corporate partner of the LLP. There is no educational qualification prescribed, hence any person over eighteen years of age is acceptable as the designated partner so long he is otherwise capable of entering into contracts.

1.
How much Company Registration Cost in India?

There are two components for deciding the Pvt Ltd registration cost in India; these are charges for company registration payable to setindiabiz for their professional services and the government fee for company registration. The company registration fee varies based on the authorised capital of the company and the registered office address of the company. To promote startup India, We have kept a very reasonable fixed fee of Rs 2999/- for all over India. You need to pay government fee on actual basis.

2.
How much time is required to register a company in India?

If the documents of the promoters and the registered address are in order and otherwise eligible, then the company may get registered within one week. However, delay cant be ruled out based on the ROC working.

3.
What is the time taken by setindiabiz.com in company registration?

Setindiabiz is having experience of over 15 years now in company registration in India. The time taken shall solely depend on the quality of information and documents supplied for the registration of the company in India. We process the application within 24 hours.

4.
What are the documents required for company registration?

For Pvt ltd company registration in India, broadly, there are two kinds of documents required. One of the KYC of the promoters, while the other category is the documents of the registered address of the company. We have categorically mentioned the list of documents required for company registration in India, in the upper section of this webpage.

5.
What documents are eligible as Identity Proof of Director for limited private formation?

For incorporation of a Pvt Ltd company under the companies act, 2013, any one document from below list of the document is acceptable as Identity Proof of the director or shareholder

  • Passport
  • Driving License
  • Voter ID Card

6.
What documents are eligible as address Proof of Director for limited private formation?

For Company Incorporation, any one document from the below list of documents of the director or shareholder is acceptable. The document in support of address proof should not be older than two months.

  • Bank Statement or Passbook with the transaction entry.
  • Electricity Bill in the name of the promoter.
  • Telephone bill, or any other Mobile Bill.
  • Utility bill in the name of promoters like Gas Bill.

7.
What are the documents on which the director signature is required for company registration?

For Private Limited Company Formation, there are several government forms in which we shall prepare for the signature of the first directors and the subscribers of memorandum and articles of the company.

  • DIR-2, Consent from all the director DIR-2, Consent from all the director download DIR-2 word | Create Online Create Online Dir DIR-2
  • Declaration of Promoter - Non-Deposit Download Declaration of Promoter Non-Deposit Pdfdownload Declaration of Promoter Non-Deposit Word | Create Online Create Declaration of Promoter
  • Declaration of Promoter INC-9 A Declaration under Companies Act 2013
  • Subscriber Sheet of MOA & AOA

1.
Is an office required for starting a Private Limited Company?

Yes, a company must maintain a registered office all the time. Any change in the registered address must be reported to the ROC within fifteen days in INC-22. Click here to read more.

2.
What address is acceptable as the registered office for the company?

The registered office of the company should be such that is under key and lock to keep and preserve legal documents. There is no requirement for a commercial place for the registered office of the company. It can be held at the residential address as well.

3.
Can I register a Pvt Ltd Company at my residential or home address?

Yes. There is no restriction in law on keeping the residential address as the registered office of the company so long you can put company nameplate there and get NOC from the owner of the property.

4.
Can coworking office space/ Virtual Office address be the registered office of the company?

The registered address of a company is its physical office location where all the government letters and notices can be sent. This is a mandatory requirement under section 12 of the companies act, 2013. Further, the statutory records of the company also need to be maintained at the registered address of the company. Hence having a registered address at coworking space is not acceptable unless this is a lockable area.

5.
What documents are required as proof of the registered address for company registration in India?

A Private Limited Company is incorporated with a physical address as the registered office of the newly registered Pvt Ltd company. Following are the list of the documents which is acceptable as proof of premises where the registered office of the company is situated. The address premises proof should not be older than two months.

  • Electricity Bill,
  • Gas Bill,
  • Telephone Bill,
  • Mobile Bill
  • NOC from the owner

6.
Do I need to take a NOC for a registered address? What is the format of NOC?

Before a company occupies any premises as its registered address, a no-objection certificate must be obtained from the owner of the premises. Similarly, at the time of filing for company registration, we need a NOC from the current owner of the premises along with proof of ownership as explained above. Click here to download NOC Format

1.
What is essential compliance that has to be done after incorporation of the company?

A company has to comply with the companies act provisions, such as filing of a declaration to commence its business immediately after depositing of capital in the company bank account. Other main compliances are appointing the first auditor within 30 days, issuing the share certificate and pay state stamp duty within 60 days. Request you to visit our dedicate webpage on Post Company Registration Compliances.

2.
Is it possible to change the registered office address of the company after incorporation?

Yes. The registered address of a company can be changed easily within the same city by filing form INC-22 to the ROC with proof of new address and NOC. Please refer to our dedicated webpage on the change of the registered office of the company.

3.
Do I have to renew the Private Limited Company every year?

Not at all, the company once registered exists until it is legally closed. The registration certificate of a company is valid throughout and does not require any renewal as such. However, a company has to file annual returns to the ROC and Income Tax Department.

4.
What is the expected cost of compliance for a company?

The regular cost of compliance of a company may consist of accounting, GST & TDS Returns, statutory audit and annual return filing to the ROC and the Income Tax Department. The overall cost of compliance would differ from company to company based on the number of transactions and turnover. For a startup, this cost is around twenty-five thousand in a year approximately.

5.
Is it mandatory to have a statutory audit of the company?

Yes, under section 139 of the comp[anies act, every company must get its books of account audited by an independent CA who is appointed as an auditor of the company. The first auditor is appointed within 30 days of the incorporation of the company.

6.
What is the Annual Return that has to be filed by the company?

Every company, after the conclusion of AGM, need to file ROC Returns where the balance sheet of the company and any significant changes are reported to the ROC. The due date of filing the ROC Return is generally in September and October. Please click to read more.

7.
How to Close a Company?

The winding-up of a company is easy for the defunct or inactive company. You can file STK-2 form with attested copy of a financial statement by a CA. Click to read more.

1.
How to register a company with a foreigner /foreign corporation as a shareholder ?

The entire process and documentation are different for a company with foreign shareholding. We have a separate team that takes care of Foreign Direct Investment (FDI) Cases. You may navigate to the relevant page for more information on FDI or how a foreign corporation can open an office/ company in India.

2.
What are the sectors where FDI is prohibited in India?

FDI is generally allowed in most of the sectors for Starting Business by a foreign investor and however for strategic reasons and internal security following sectors are prohibited for the foreign investors.

  • Lottery Business including Government /private lottery, online lotteries, etc.,
  • Gambling and Betting including casinos etc.,
  • Chit fund/ Nidhi company,
  • Trading in Transferable Development Rights (TDRs),
  • Real Estate Business or Construction of Farm Houses
  • Manufacturing of Cigars, cheroots, cigarettes, of tobacco or tobacco substitutes,
  • Sectors not opened to private sector investment e.g. Atomic Energy, Railway; etc.,

3.
What kind of business entities a foreign investor can set up in India?

"In India there are various types of business which can be set up such as a proprietorship, partnership, one person company, LLP, society, trust etc. However the foreign exchange management act allows a foreign investor to invest in India only in following categories of entities. A foreign investor thus can not invest in a One Person Company, Proprietorship, Partnership Firms. The investment in society, trust and section 8 company or any other association of person is permitted subject to compliance of Foreign Contribution Regulation Act (FCRA)

  • Limited Liability Partnership (LLP),
  • Private Limited Company (PLC),
  • Public Limited Company (PLC),
  • Section 8 Company (However with compliance of FCRA),"

4.
Who all can invest in India, i.e. constitution and nature of investing entity?

"Following types of foreign entities can invest in India without any restriction provided the sector is open for investment either under automatic route or approval route.

  • Foreign Company,
  • Body Corporate Incorporated Outside India
  • Non Resident India(NRI)/Person of Indian Origin(PIO)"

5.
Is there any act to regulate competition in India?

Yes, to promote free and fair trade, indian parliament passed The Competition Act, 2002, under which an apex body to decide the case of complaint relating to anti-competitive agreements and abuse of dominant position was established as the Competition Commission of India.

6.
Can companies in India enter into foreign technology agreements?

Can companies in India enter into foreign technology agreements?The foreign technology agreements are permitted subject to the foreign direct investment policy in force. most of the sectors for foreign technology agreements are open for 100% FDI.

7.
How can a foreign investor transfer funds into an Indian company?

The foreign investors need to remit the capital amount to the Indian bank account through banking channels in foreign exchange, however funds can be remitted from NRO accounts maintained in foreign exchange.

8.
What are the reporting requirements of the Reserve Bank of India?

Once capital is received through inward remittance from the foreign investor, the indian bank must be intimated about the purpose of remittance. The indian banker then issues FIRC (Foreign Inward Remittance Certificate) stating clearly the purpose of inward remittance. The indian company needs to then report to the RBI in the form FC-GPR about the FDI.

9.
Are investments and profits earned in India repatriable?

Yes, the profits arising out of the indian company where foreigners have invested is 100% repatriable without any restriction after payment of all corporate tax and dividend distribution tax.

10.
What are the forms in which business can be conducted by a foreign company in India?

"A foreign citizen or a foreign corporation can operate a business in India only in following manners

  • By setting up a company or LLP as per prevailing FDI Policy
  • As a foreign company by registering a Branch Office or Liaison office
  • To execute a project you may register a project office"
  • 11.
    How can a foreign investor transfer funds into an Indian company?

    The foreign investors need to remit the capital amount to the Indian bank account through banking channels in foreign exchange, however funds can be remitted from NRO accounts maintained in foreign exchange.

    12.
    What are the reporting requirements of the Reserve Bank of India?

    Once capital is received through inward remittance from the foreign investor, the Indian bank must be intimated about the purpose of remittance. The Indian banker then issues FIRC (Foreign Inward Remittance Certificate) stating clearly the purpose of inward remittance. The Indian company needs to then report to the RBI in the form FC-GPR about the FDI.

    13.
    Are investments and profits earned in India repatriable?

    Yes, the profits arising out of the indian company where foreigners have invested is 100% repatriable without any restriction after payment of all corporate tax and dividend distribution tax.

    Six Stages of Company Registration in India

    Start with placing an order with us. We have ready-made plans for you. For any help contact us

    Then arrange the required documents and submit them online to us. Visit: Submit Documents Online.

    We would make an application for the issue of digital signature for all the promoters.

    Then proceed for Name Availability Check and Drafting of the main business objective of the company.

    Well, now draft the MOA & AOA of company and file Spice Plus form for Incorporation of the company.

    Finally, the ROC shall issue the certificate of Incorporation, ePAN & TAN. Your startup is set for business now.

    Advantages & Disadvantages of Private Limited Company

    Advantages

    1.
    Limited Liability of Shareholders (Owners)

    Limited Liability implies that the owners or shareholders of the company are not personally liable to pay debts of the business. They are only responsible for the unpaid shares of the capital of the company. In order to reap the Limited Liability Benefit, the owner needs to comply with all laws.

    2.
    Perpetual Succession

    Perpetual Existence implies that the company is unaffected by the death of the owner or the transfer of its shares to a new establishment. The best part of perpetual existence is that a company will continue to exist, no matter how many directors, officers, and shareholders join or leave.

    3.
    Easy Transfer of Ownership

    The shares of a company are considered as movable property and are freely transferable. A shareholder can transfer shares to any person by just executing a share transfer form and handing over the share certificate of the Company. However, such share transfer must be done under the applicable provisions of the articles of association.

    4.
    Option to Sell the business

    The companies can be sold or transferred in its entirety, and the entire process of selling the company is easy and straightforward. You must have seen many exits at a very high premium price to the potential buyer of the company, for example, the sale of Flipkart to Walmart.

    5.
    Can a company own property in its own name

    Like a person a private limited company can purchase, sell, own, possess, enjoy and transfer property rights to anyone in its own name. Moreover, no claim can be made upon the property of the company by the shareholder as long as it exists.

    6.
    Tax Advantages

    The tax rate for a company incorporated in India is the lowest in the world. For a manufacturing company, the tax rate is 15% whereas for all other kinds of companies such as trading, services etc. the Income Tax Rate is 22%. There are some nominal surcharge and cess on and over the above said corporate Income Tax Rates.

    7.
    Easy to Raise Money Through Private Placement

    Raising money in a proprietary concern, partnership, or LLP is complicated and cumbersome. A company can get investment from a closed group of people up to 200 shareholders by way of private placement is straightforward for a company. The company can either allot new shares to the investors/angel investors on a price higher than the valuation of the stock. Since the companies act prescribes a clear and precise method to raise funds; hence this is a preferred choice for new startups.

    8.
    Foreign Direct Investment (FDI)

    Traditionally the FDI comes to a company form of business, and The Indian companies may allot new shares to an overseas investor, or enter into a joint venture and create a new company for a specific purpose. When it comes to funding and FDI, the company is the best choice.

    9.
    Capacity to Sue and to be Sued in Its Own Name

    Private Limited Companies enjoy the advantage to carry out legal proceedings and to bring a suit in the court of law. Just like any other type of person, a company being an independent legal entity, can initiate legal action against any other person and similarly can be sued in the court of law.

    Disadvantages

    1.
    Restricted Access to The Stock Exchanges

    The private limited companies can not issue shares to the public at large because of two main reasons. The maximum number of the shareholder in a private limited company can be only up to 200, and a private limited company can not issue prospectus neither it can advertise calling public at large to subscribe to its shares. In case you wish to avail the benefits of the public issue, then you should incorporate a public limited company.

    2.
    Public Disclosure of Company Data at MCA

    The details of the company are available for public inspection and view at the website of the ministry of corporate affairs. On payment of a nominal fee, any person can obtain copies of the records of a company from the MCA. Every year a company is required to file an annual return after its AGM, the forms submitted at the time of filing the annual return is also available for public view. The data of a private limited company thus can be used by competitors. Though in a way, we can say that this is not a disadvantage because stakeholders can very well verify the genuineness of a company.

    3.
    Increased Cost of Legal Compliance.

    Every company is required to get its books audited at the end of the financial year, and file ROC Returns after holding the annual general meeting of the company. For the companies which are doing good business and growing, the audit and statutory disclosures are in a way useful to protect the interest of the shareholders of the company. However, where the number of transactions is meagre and in some cases where the company is in losses, the legal cost of compliance is high if you compare with an LLP Form of business. Hence, where the scale of operations is going to be less, then we recommend registering an LLP.

    4.
    Limited Personal Control

    The concept of a company involves investment by several persons in the company and with the dilution of the stake the control on the company also weakens as other stakeholders will also have a proportional say in the decision making. Though most of the decisions of the company can be taken by a simple majority vote in the shareholders meeting, however for certain critical decisions, a special resolution is required. For passing a special resolution consent of 75% or more is needed.

    5.
    Issue of shares/transfer - Only among existing shareholders

    A private limited company is a closed group of people; hence the entry of outsiders is restricted. The new issue of shares needs to be offered first to the existing shareholders before selling to outside investors. Similarly, for the transfer of shares to any third party, the consent of the board of directors is required.

    Compare Forms of Business

    Check advantages and disadvantages of Common Business Entity Types

    • FEATURES
    • Private Limited Company
    • One Person Company
    • LLP
    • Partnership Firm
    • Proprietorship Firm
    • +
      Separate legal entity
      • A Company is a separate legal entity separate from its promoters
      • An OPC is a separate legal entity separate from its promoters
      • An LLP is a separate legal entity separate from its promoters
      • A Partnership is a legal entity but not different from partners
      • The proprietor and the proprietorship business is the same thing
    • +
      Limited Liability
      • Shareholders of a Company are bound to pay only up to the capital they have subscribed to the company.
      • In OPC, unlike a proprietorship, the shareholder cannot be asked to pay beyond his subscribed capital
      • The partners of an LLP can be called upon to pay only up to the amount of capital they subscribed to.
      • There is no protection of limited liability, even the personal properties of partners are at risk for losses of business
      • The proprietor is the whole sole of the business, and his liability to the debts or losses of proprietorship is unlimited.
    • +
      Number of members
      • A Company can be opened with at least two people. However, the maximum number cannot be more than 200
      • In the case of OPC, Only one person can be a shareholder. He would be required to appoint a nominee.
      • With two partners an LLP can be incorporated, there is no limit on the maximum number of partners
      • A Partnership firm can start with a minimum of two partners, the, however, the maximum number is capped at 20
      • Only one person is required for proprietorship, also known as proprietor.
    • 2 - 200
    • 1
    • 2 - unlimited
    • 2 - 20
    • 1
    • +
      Number of Directors /DP
      • A company can be opened with at least two and a maximum of 15 directors. The same person can be a shareholder as well as director
      • At least one person must be appointed as director of the company. The shareholder and director may be the same person
      • The minimum two designated partner is required in an LLP & there is no limit to the maximum number.
      • There is no separation of ownership and management in case of a partnership. All partners are equally responsible for the conduct of business.
      • In case of a proprietorship, the proprietor is solely responsible for the conduct of business.
    • 2-15
    • 1-15
    • 2 to unlimited
    • Not Applicable
    • Not Applicable
    • +
      Foreign Investment (FDI)
      • Foreign Direct Investment in case of a Private Limited Company is available under the automatic route.
      • FDI is not allowed in One Person Company
      • FDI in LLP Is permitted subject to prior approval from the central government
      • FDI is not allowed in Partnership Firm
      • FDI is not allowed in proprietorship Business.
    • +
      Ownership Transfer-ability
      • The shareholding of a Pvt Ltd Company is easily transferable
      • OPC Shares can be transferred to new shareholder along with the nominee
      • In LLP share of a partner can be transferred with the consent of all other partners.
      • Not Possible, every admission or removal of partner amounts to the new firm.
      • Not Applicable
    • +
      Perpetual Existence
      • A Company exists beyond the life of its owners /shareholder. After the death, the shares transmits to legal heirs
      • OPC Continues to exist even after the death of its only shareholder, as it passes to the nominee.
      • The LLP also have perpetual existence and exists beyond the life of the designated partner
      • No perpetual existence, with the death of a partner, the partnership ends.
      • No perpetual existence, with the death of the proprietor, it ends.
    • +
      Tax Benefits
      • The company tax rate is flat at 25% on its profits
      • The company tax rate is 25% on its profits
      • LLP Income Tax Rate is 30% on its profits
      • Partnership firms are taxed at 30% on its profits
      • For a small business with low turnover, there is the benefit of individual tax slabs
    • Effective
    • Effective
    • Low
    • Low
    • Good
    • +
      Statutory Compliance
      • The company is required to file an annual return, balance sheet to ROC and ITR around the month of September
      • OPC is required to file an annual return, balance sheet to ROC and ITR around the month of September
      • LLP have to file an annual return in form 11 and financial statement in Form 8 and ITR
      • Only ITR is to be filed
      • ITR is required to be filed if the taxable income is more than 2.5 Lac
    • High
    • High
    • Low
    • Minimum
    • Minimum

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    Google Review of Setindiabiz, We are Lovin It

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      <

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