FAQ of Proprietorship Formation Online

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Reading Time: 2 minutes| (Last Updated On: January 3, 2018)

FAQ of Proprietorship Formation Online

FAQ of Proprietorship Formation Online

What is Private Limited Company?
A sole proprietorship is a the simplest form of business, which you will find all over world. Its like you woke up today and want to sell grocery, and you purchase goods from a wholesaler and start selling them instantly. You have created a proprietorship, No registration is needed. In case you need to open a bank account approach your nearest bank account and open a current account with them.

For small businesses, what are the benefits of Pvt. Ltd. Companies?
Private Limited Companies offer reliability or trustworthiness to businesses in financial institutions, suppliers and potential clients. As it makes easier for companies to receive loans at suitable terms from convincing potential clients or banks while making and finalising deals, these companies are trusted more than other forms of business. (1) Limited liability of shareholders to the extent of their contributed capital only. (2) Limited liability of shareholders to the extent of their contributed capital only.(3)Perpetual succession of a company

Is the structure of Pvt. Lvt. Company favourable for any type of business?
Yes, private limited company form of organization is suitable for any type of business. A private limited company is known to be reliable and more trustworthy as compared to other business structures.

What are the responsibilities of a director?
Director of the Company is responsible for managing the company in an efficient way. The responsibility of a director also depends upon the kind of directorship he owns in that particular company. It is of great significance to know that responsibility of an executive director or a managing director is greater than a non-executive director who holds the directorship as an expert or consultant.

How to form a Private Limited Company?
Any two or more members/ persons can form a private limited company. A minimum of two individuals shall act as directors of the company. The shareholders (initial members/promoters) can themselves choose to become director. It is practically seen that generally shareholders are also directors of the same private limited company filing of required documents (Director Identification number, Application for name approval, Incorporation documents such as MOA/AOA/, registered address) with the Registrar of Companies is

What does Director Identification Number (DIN) imply?
If any individual intends to become director in a company, he/she needs to apply for director identification number, issued by the Ministry of Corporate Affairs. It is a proof of identity and address, thus is required to be submitted along with required fee while submitting Director Identification Number(DIN) Application. Director Identification Number (DIN) can be approved within 3-4 days, if the documents are in an orderly manner. The best part is that approved DIN is valid for life and can be used by the director, even if he/she has directorship in more than one company.

FAQ of Proprietorship Formation Online

Is there any qualification required to become a director?
Any individual can be a shareholder in a private limited company. For becoming a director in a company, no professional or educational qualification is required.

Can registered office be changed after the registration of the company?
Yes, registered office can be changed after the registration of the company anytime by ensuring that you follow a specified procedure. It has to be taken care that the changed address of the office needs to be situated within the same state or in a different state from the state in which it was originally registered.

FAQ of Proprietorship Formation Online

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