If you are thinking of starting a business, you must register it as per the laws and processes set by the Ministry of Corporate Affairs. The compulsory registration of a company is required to legally identify it and ensure that the business does not carry out any illicit activities. Furthermore, for business owners, company registration entails a host of benefits, especially when registering a private limited company.
A private limited company is one of the most common types of business entities, ideal for small and medium organisations. However, a business owner must register the company through the Ministry of Corporate Affairs set process. This article will provide tips and insights on private company registration.
What is a private limited company
A private limited company is a type of business entity that is owned and operated by a limited number of people. These people are the directors and shareholders of the company and own 100% shares. Since the company is privately owned, the directors and shareholders can not trade the shares publicly. A private limited company comes with the benefit of limited liability, where the shareholders are only responsible for the company’s loans and debt equal to the amount they have invested or agreed to contribute to the company.
Tips and insights into private company registration
Here are some tips and insights into the private company registration process:
The reason for registration
It is wise to register your company as a private limited company, as this will allow it to have a separate legal existence. Once you register your private limited company, it can avail of loans from banks and NBFCs from their online marketplace or platform. Furthermore, the company can also own property in its name and sue or be sued in a court of law. Company registration will also help you enjoy limited liability benefits, limiting your financial exposure.
Documents
The private limited company registration process requires the directors and shareholders to furnish some documents. They will need to provide proof of identity, such as a PAN card, Aadhaar card, Voter ID card, Driving Licence, or Passport (any one of these). Furthermore, you will have to provide proof of address by submitting documents such as electricity, telephone, and mobile bills. Ensure that you have submitted all the required documents to avoid the rejection of the registration application.
DSC and DIN
Before registering with the private limited company, you must obtain a Digital Signature Certificate from recognised authorities. DSC is needed to sign the online private limited company registration form digitally. Furthermore, you will also need to obtain a Director Identification Number (DIN). You can apply for a DIN by filling out DIR-3 or using the SPICe+ online system. DIN is needed to legally identify a company’s director.
SPICe+ form
You must visit the MCA portal to complete the SPICe+ form thoroughly. This form is used to register the company, issue DIN, TAN, and PAN applications, and register ESIC and EPFO. You must enter details such as the registered office address, director names, share capital, business activities, etc.
PAN and TAN
Unlike before, you do not need to file separate applications for obtaining PAN and TAN. The applications for PAN and TAN are automatically submitted when you fill out and submit the SPICe+ form. Once submitted, you will receive an email from the Ministry of Corporate Affairs containing the company’s Certificate of Incorporation, PAN, and TAN.
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The private limited company registration process includes many factors and legalities. If you feel that you do not understand the registration process fully, it is better to consult a legal advisor. A legal advisor will help you navigate the legalities and help you register your private limited company without any rejection.
Conclusion
The business structure of a private limited company is ideal for people who want to create a small or medium business. However, it is crucial to register the business as a private limited company to ensure it has a legal identity and can enjoy the benefits of a legally separate entity. Now that you know the tips and insights of private limited company registration, it will be easier for you to register your business.
