A Private Limited Company in India is governed and managed under the Ministry of corporate affairs (MCA). Registration of a company is easy through The Law Advice, as it is done completely online and hassle free environment. The first requirement to register a company in India a minimum is a need of two people to act as directors and shareholders. To register a Private limited company in India the Director's PAN card, address proof, and the bank statement are required with the address proof of the registered office.

A PLC is provided under Section 2 (68) of the Companies Act, 2013 which says as under:-

A company having a minimum paid-up share capital as may be prescribed, and which by its articles,

      i.       restricts the right to transfer its shares;

    ii.       except in case of One Person Company, limits the number of its members to two hundred;

  iii.       prohibits any invitation to the public to subscribe to any securities of the company.

It is highly recommendable to get a private limited company registration as this type of company offers limited liability to the shareholders with certain restrictions that are placed on the ownership.

Private Limited Company is the most popular type of business entity in India. Over 20 lakh companies have been registered in India as of September 2021 and 12 lakh companies are classified as active. All companies registered in India are governed by the MCA (Ministry of Corporate Affairs) under the Companies Act, 2013. Therefore, all the rules, regulation and MOP are decided by the Government of India on the recommendation of MCA.

Requirements to register a PLC

Requirement of Documents for registration of a PLC

Identity proof the 2 Directors (or such other directors) and submit the documents that are mentioned below:

ð PAN Card: PAN Card copy of the proposed Directors of the Company.

ð Address Proof: The address proof (Issued by the Government) submitted must have the name of the Director as mentioned in the PAN Card and the current address of the Director.

ð Residential Proof: The residential proof must also contain the name of the Director as mentioned in the PAN Card and must not be older than two months.

ð Registered Office Proof:  Registered office address of the Company such as Sale deed, Lease Deed etc.

·       The registered document of the title of the premises of the registered office in the name of the company;

OR

·       The notarized copy of lease/rent agreement in the name of the company along with a copy of rent paid receipt not older than one month;

In addition to the above, the following must also be provided as proof of registered office:

·       The authorization from the Landlord (Name mentioned in the Electricity Bill or Gas Bill or Water Bill or Property Tax Receipt or Sale Deed) to use the premises by the company as its registered office. This is usually referred to as NOC from Landlord;

AND

·       Proof of evidence of any utility service like telephone, gas, electricity, etc. depicting the address of the premises in the name of the owner or document, which is not older than two months.

Key Features of a PLC

Members

The Companies Act provide requirement of 2 persons (individuals) to register a Private Limited Company in India which can go to a maximum of 15 members as per the provisions of the Companies Act,2013.

Limited liability to the partners

As the name suggest, the liability of each member of the shareholders is limited. In case if the company is facing any loss under any circumstances then the shareholder is liable to sell Company's assets. His personal assets are not at risk here.

Perpetual succession

People die, the company doesn’t. The company once formed, survives even in the case of death, bankruptcy, or insolvency of any of the director. Meaning thereby the company last forever.

Index of the members

A private limited company has a privilege over the public company as they do not need to maintain the index of the members whereas the Public limited companies are required to maintain the index of the members.

Number of Directors

A private limited company in India is required to have only two directors at any point of time. With the existence of 2 directors, a private limited company can begin with its operations.

Memorandum of Association

The Memorandum of Association represents the charter of the company. The MOA is the legal document that is prepared during the formation and the registration process of the company. The MOA specifies the relationship between the shareholders and it specifies the objectives for which the company is formed.

Articles of Association

The AOA lays the rules and the regulations that are set for the internal management of the Company. The duties, rights, and powers of the management of the company are specified in the AOA. An article of association is a subsidiary of the Memorandum of association.

Benefits of Registration as PLC

Before starting a business it is important to decide the objectives of the company, the business structure, and the operations based on which the company has been chosen. The private limited company is a privately held entity and is preferred by most entrepreneurs. The Private limited company registered in India can have 50 shareholders and limit the liability of the owner to their shares and restrict from publicly trading the shares.

A PLC has Limited Liability

When the businesses see unseen financial crises and are on the verge of closure, the shareholders of the private limited company do not face the risk of losing their assets. Only the amount that is invested while starting the business is lost and the director's assets are safe.

Access to funding if registered as PLC

The private limited companies easily accommodate the equity funding as there is a difference between the shareholders and directors. Venture capitalists and private equity funds are likely to invest in any other structure.

Borrowing capacity of a PLC is always higher than ordinary business

The private limited companies in India enjoy the privileges of borrowing more funds than the LLPs as there are more options of taking debt. Banks help in assisting with financial aid to the private limited companies than the OPCs and the LLPs as the debenture issue and convertible debentures are always available. The banks and the financial institutions welcome the private limited companies better than the partnership entities.

Better and greater credibility

A private limited company is required to make a lot of information about the structure, operations, and financials available to the Registrar of the companies. This information ends up in the public domain. Therefore the vendors, lenders, employees can find the information that is relevant to the company such as the authorized capital, name of directors, registered office, etc. This information makes the businesses more credible than the entities that done furnish this information.

Easy exit from PLC

Private limited companies in India can be sold or transferred, either partially or in full to other individuals or entities without any disruption to the current business which gives it, it’s unique feature and relief to the directors and management.

Domestic and global Expansion

If the business developing product on a global scale and aiming for expansion of operations across the world, then it is important to get the investments and the form of collaborations with foreign establishments. One of the advantages of the private limited companies in India is that 100% through the automatic route, which means there is no requirement of any government approval for foreign companies to make investments in India. The partnerships, LLPs need acceptance from the government.

Multiple opportunities in PLC

To understand the opportunity for a more Successful entrepreneurs one always on the lookout for opportunities wherever they are possible. The private limited companies have the scope of utilizing the chances as the business grows over time whereas the sole proprietorships and the partnerships cannot take up as they are tied up.

Better management

Since private limited companies are regulated by the Companies Act 2013 and are required to follow all the stringent procedures, disclose norms, and also comply with the various legal requirement, they are more organized in creating value.

A private limited company offers many advantages over other entities, it is always best to get the registration done by experts to avoid any discrepancies.

We will help you in registering a Private Limited company

TLA will help you in incorporating a Private Limited Company within 10 days subject to government processing and the availability of the documents.

·       Step 1: Once a request is received a legal consultant from TLA will contact you and understands your business requirements and suggests the best suitable entity for you.

·       Step 2: All  the necessary documents would be collected physically or by postal means.

·       Step 3: An application would be submitted for obtaining the Digital Signature Certificate. Simultaneously a name request would  be sent for approval to the MCA.

·       Step 4: Once the name request is approved the incorporation documents would be drafted. These incorporation documents need to be signed by all the Directors and the shareholders.

·       Step 5: Once they are signed they are sent to the MCA for approval.

·       Step 6: Once the company is incorporated an Incorporation certificate is provided along with the PAN and TAN for the Directors.

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