Private Limited Company Registration Process in 5 Steps in 2019

According to the MCA Annual Data Reports, more than 10,000+ private limited companies are formed every month!

Private Limited Company is considered a popular corporate business entity among small, medium and large companies in India.

Many don’t know the Private Limited Company Registration Process and what are the required procedures, documents which is needed while forming a private limited company.

Company Formation is not enough you need to follow 30 Days Compliance After Incorporation Of Company which many companies fail to follow and they end up with huge penalties!

This article will help you in understanding Private Limited Company registration process in detail and how to set up a private limited company in India.

So, Let’s Start.

Let’s first breakdown to understand about Private Limited Company.

“Private” means it restricts the public to buy the company shares whereas in case of a public limited company it allows the public to buy the company shares. The word “Limited” denotes Company’s shareholders which can be minimum 2 and maximum 200 are liable for its debt.

The shareholders can be a person or a company including foreign companies. The shareholders cannot offer their shares to the general public over stock exchange. The minimum capital required for the private limited company according to Section 2, Clause 68, Companies Act 2013 is 1 Lakh.

The main advantage of setting up a private limited company is that if a company goes into the loss, the shareholders are liable to sell the shares to recover the loss. The shareholder’s personal assets are not at the risk which is the main reason why most of the businesses choose a private limited company.

Steps To Form a Private Limited Company in India

Step 1:  Obtain a Digital Signature Certificate (DSC)

The first step is to obtain DSC i.e Digital Signature Certificate for the directors involved in the private limited company. The main purpose of the DSC is to sign the eforms . According to, The Information Technology Act, 2000 has provisions for use of Digital Signatures on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. This is a secure and authentic way to submit a document electronically. DSC is mandatory for all the directors in the company.

How You Can Obtain DSC?

You can obtain DSC by directly approaching Certifying Authorities (CAs) with original supporting documents, and self-attested copies will be sufficient.

Working Days: 1 to 3 Days.

Step 2: Filing of MOA & AOA, SPICe INC-32

After registering DSC, You need to verify your company name on MCA Portal -> MCA Services -> Check Company Name

Note: Your Company name should not be registered and should not be taken.

If taken, ensure that your company name should not be same as brand name.

next, for name approval there are 2 options:

1. Run approval: With run (Reserve Unique Name) approval you can ensure whether the name is available or not. But this method doesn’t allow you to resubmit once it is submitted. In case name gets rejected you can resubmit by paying Rs.1000 for each submission.

2. File through SPICe INCE -32 form:  Incorporating a company through Simplified Proforma for Incorporating Company electronically (SPICe -INC-32), with eMoA (INC-33), eAOA (INC-34), is the default option and most companies are required to be incorporated through SPICe only. With SPICe INC-32 you can resubmit 2 times.

Working Days: 7 – 9 Days.

Step 3: Issue the Incorporation Certificate:

Once MOA and AOA are approved, you will get incorporation certificate which will include the date of incorporation and PAN number of the company.

Working Days: 1 – 5 Days.

Step 4: GET PAN & TAN Applications

Once you get incorporation certificate, you will get PAN & TAN application by MCA.

Working Days: 1 – 3 Days.

Yeah! Your Company is now registered!

FAQs On Private Limited Company Registration Process

Q. 1. How long does it take to register a private company?

Ans On an average, it takes up to 15 days to register a Private Limited Company subject to document verification by MCA and the processing time is dependent on a case to case basis.

Q. 2. Who can be a Director of a Company?

Ans Any person over the age of 18 years can become a director in a company. Also, there are no conditions on residency or citizenship. Hence, NRIs and Foreign Nationals can easily start and manage a private limited company in India.

Q. 3. What are the forms on which Director or Shareholder have to sign to Pvt Ltd Company in India?

Ans Following are the forms on which promoters need to sign, All the forms/formats to be printed on plain A-4 size paper and signature should be preferable with a blue ink pen.

• DIR-2 Consent from Directors
• INC-9 Declaration form

Q. 4. Can A salaried person start a Private limited company in India and become a Director?

Ans Absolutely. A salaried employee can become the director in private limited, LLP or OPC private limited company. One needs to check the employment agreement if that allows for such provisions. In a lot of cases, the employers are quite comfortable with the fact that their employee is a director in another company.

Q. 5. When we register as a company, can we give the home address as the company’s registered office?

Ans Yes, one can register the company at their residential address. A utility bill copy of the same will be required.

Q. 6. Is it necessary to book an Auditor?

Ans Yes, a private limited company must book an auditor, no matter what its revenues. In fact, an auditor must be appointed within 30 days of incorporation. Compliance is important with a private limited company, given that penalties for non-compliance can run into lakhs of rupees and lead to the blacklisting of directors.

Q. 7. What are MOA and AOA?

Ans These are essential documents for a Company that contains the rules, vision, and mission of your organization, and define, among other things, the exact business and the roles and responsibilities of shareholders and directors.

Q. 8. Can a Private Limited Company be formed with 2 ROCs at the same time?

Ans No, Private Limited Company cannot be formed with 2 ROCs at the same time.

Our Conclusion

No Doubt, Private Limited Company is a most popular corporate entity for companies and it has many benefits for new companies. Private Limited Company registration process requires a lot of commitment which becomes very difficult at the early stage of starting out a company. It is recommended to take the help of professional CA expert.

Author: I am a Chartered Accountant and founder of InCFO which is in Compliance of Company Matters. My expertise lies in Accounting, Taxation, Compliance, GST, Company Formation, Various Registration etc. Reach me at [email protected]