There are various forms of company registration like Private limited company, Public Limited Company, Limited Liability Partnership, One Person Company etc. Each of these forms of company has its own merits and demerits.
Like in Public Limited Company you need at least 3 Directors and 7 members. The compliances of Public Limited Company are more than other forms of company registration.
Limited Liability Partnership is a new form of Partnership with benefits of company registered with MCA. However the concept of LLP has not gained acceptance as much as Private Limited Company has got. LLP also has tax rate more than that of Private Limited Company. People have also some misunderstanding with regard to LLP that the liability of all the partners of LLP is limited. But it is not so, the liability of partners other than Designated Partners is limited, and the liability of Designated Partners is limited. And there is a requirement of at least 2 Designated Partners in each LLP.
One Person Company is preferred by those person who want to keep the ownership of the company single handedly. It is another form of Sole Proprietorship with some benefits of a company registered on MCA. One Person Company has certain limitations with regard to turnover and capital. Once these limits exceed the threshold, the OPC is to be converted mandatorily to Private Limited or Public Limited Company.
Private Limited Company is the most preferred form of company that is registered and is most widely accepted in India.
Before selecting any of the above option, one should consider the Cost of Incorporation, Number of Annual Compliances, Cost of annual compliances, Tax Rates, Acceptability of the form of business in the mind of your customers, investors.
Since the Private Limited Company is the most accepted form of company registration in India, We would like to discuss further about Private Limited Company.
Private Limited Company
About Private Limited Company
A Private limited company is the most popular corporate structured form of business establishment in most of the countries including India. It is considered to be one of the most Suitable and Simplified form of doing business for large classes of the peoples doing economic activities having the least legal requirements. Since it has a separate legal entity in the eyes of law hence a variety of benefits are enjoyed by it such as the major feature of Limited Liability. It can easily get financial assistance by various methods including financing through Banks & also from Private lenders. The management of this entity can also make their employees to hold its shares by the way of Employee stock option scheme so that the financial and operational aspects of the company can be strengthened by such an easy way. It is governed by the provisions Companies Act, 2013.
> A minimum no. of 2 members & maximum of 200 (Excluding employees and past employees having membership the Company).
> Minimum 2 directors required and a maximum of 15 directors, this limit of maximum directors can be removed by passing necessary resolutions in the meetings of company.
> DSC (Digital Signature Certificate) is required.
> DIN (Director Identification Number) is required in favour of the directors.
Documents for Company Registration:
> PAN card details of all the directors and shareholders.
> Address Proof such as Aadhar Card/ Driving Licence/ Voter card, of all the directors and shareholders.
> Passport size photograph of directors.
> A Copy of Rent agreement & No Objection Certificate from the landlord of the business place if the business premises are rented or leased in favor the Company.
> Other utility bills such as telephone, water, gas, or electricity bill as residential proof of the registered office. It should not be older than 2 months.
Documents that you must keep in record after you get your Company Registration:
> DIN of Directors
> Certificate of Incorporation
> Memorandum of Association
> Articles of Association
> PAN Card & TAN no
> ESI/ EPF number
Some General Registration that you can take after you get your Company Registration:
> GST Registration
> Import Export Code
> Professional Tax
List of Basic Annual Compliance of Private Limited Company are (Post Incorporation Compliances):
> Auditor Appointment: Every company is required to appoint a Chartered Accountant for the Audit of the company. It is to be done within 30 days of the Incorporation of the company.
> Form INC20A: It is the form of Commencement of Business. Every company has to open a bank account and introduce the capital in the bank. After the capital is introduced in the bank, form INC20A is to be filed. It is attested by a professional. A company can start business only after filing Form INC20A.
> Form DIR-3 KYC: Every Director of the company who has been allotted a DIN is required to File form DIR-3 KYC. This is to be done annually. Even those DIN holders who are not a director in any company are also required to file form DIR-3 KYC. Directors who are disqualified but want to keep their DIN active must also do DIR-3 KYC every year.
> Annual Statutory Audit: Every company is required to get its account audited by a Chartered Accountant. Even if the company is not working or is currently having no turnover then also the Annual Statutory Audit is mandatory.
> Annual ROC: ROC is a term used generally. It refers to annual filing of Forms AOC-4, MGT-7. It is also mandatory to be filed every year.
Other than above compliances, there are many other forms which may be required to be filed by the company like MSME, BEN-2, DPT-3, forms related to Charge etc.
A company is also required to file forms at the time of Appointment of Director, Removal of Director, Appointment of Auditor, Removal of Auditor, Company Name Change, Change of Address of Company, Amendment of Paid Up capital/ Authorized capital.
A professional consultant may help you to keep all the compliances up-to date.
You may contact the author for further information at +91-9899595719 or Taxwizersconsultant@gmail.com or https://www.taxwizersconsultant.com/
Disclaimer: The above article is only for information purpose and is on based on the author’s interpretation of the relevant provision. The same should not be considered as professional advice.