The impact of Covid-19 has been devastating on the lives of people all around the world. There has been a huge amount of job loss and unemployment all around and no one seems to know what to do. Many who have lost their job have started doing business from their homes. This enabled the flow of income into the families and provided employment to smaller groups of people. Raising the question of how to register a Private Limited Company.
The Private Limited Company registration is one of the fastest-growing business models in the post-Covid period. There have been almost 1,20,000 new companies that have registered in the year 2020. This is a growth of more than 38000 more than the average growth in the companies.
What is a Private Limited Company?
A private Limited Company is one that is owned by a small group of shareholders or members of the same company. The company provides limited liability to the shareholders and the liability is restricted to the number of shares held by the individual.
These shares are not traded publicly but are rather held privately.
A private Limited Company under the Companies Act, 2013 allows for the incorporation of the companies on various kinds of liability. Under the umbrella of a Private limited company, there are several other companies that one can apply for.
What are the highlights of a Private Limited Company?
A private Limited has its own set of factors that helps distinguish it from the other model of companies. Some of the prominent elements are as follows:
- Members: As per the regulations of the Companies Act, 2013 a private Limited Company requires a minimum of 2 members and a maximum of 200.
- Perpetual Succession: A company is a separate entity and is unaffected by the death, bankruptcy of its members. A company keeps existing till it is dissolved under the law.
- Limited Liability: Private Limited Company provides limited liability to its shareholders by being responsible for only the shares they hold and nothing more.
- The number of directors: There has to be a minimum of 2 directors for a company to start operation.
- Name: When a company gets itself registered under the category of Private Limited then they have to include the words “Private Limited” in their company name.
- Paid-up capital: The minimum requirement of paid-up capital in a Private Limited Company is set at Rs. 1 Lakh under the Companies Act, 2013.
Types of Private Limited Company
The Private Limited Company Registration is an umbrella term for the registration of various types of companies within it. Some of the important types are:
- Limited by shares: These are companies that provide the shareholders with limited Liability and are dictated in the Memorandum of Association. The members can not be held accountable for more than what they hold the shares for.
- Limited by Guarantees: In a company limited by guarantee, the shareholder is accountable for the shares they hold. This is dictated by the guarantee undertaken by the members in the Memorandum of association. This guarantee can only be revoked if the company dissolves.
- Unlimited: These are companies where the businesses have no restrictions on the liabilities of the shareholder. The liability is not restricted to the shares they hold and can be held accountable for the company’s losses. Even after not providing limited liability to the shareholders, it is still considered a single entity.
How to apply for a Private Limited Company Registration?
The registration process for the Private Limited Company is very basic and simple and one can easily get their company registered hassle-free.
The steps to get Private Limited Company registration are:
- The person has to fill the application form and make the required payment.
- The Experts will call and get in touch to make arrangements for the required documents for the registration process.
- A draft will be drawn for the Private Limited Company registration.
- After the draft, an application for the DIN number and DSC is done.
- The MOA and AOA are created and submitted to the concerned authorities.
- All the documents are then sent to the Registrar Of Companies (ROC) of the concerned state for registration.
- After all the process it is a matter of time before the company gets registered. The document is then sent to the person applying for the Online Private Company registration.
Benefits of Private Limited Company Registration
There are several benefits of registering a Private Limited Company over other models of company registrations. Some of the important benefits are:
1. Limited risk
2. Legal Entity
3. Business Continuity
4. Raising Funds
6. Tax Advantages
Documents required for Private Limited Company Registrations
The registration of a Private Limited Company in India requires certain documents and thus it is important to keep the documents ready in order to start the process of registration.
Some of the documents required are:
- PAN and TAN for the company
- Filing with the Registrar of Companies (ROC)
- DIN Number and DSC
- Drafting of the Memorandum of Association & Articles of Association
- Issue of the Certificate of Incorporation
- Paid-Up Capital of 1 Lakhs
The Private Limited Company Registration has seen a drastic rise in the number of businesses. There have been more and more food businesses starting every other day down due to a lack of jobs and unemployment.
This has provided the opportunity for individuals to bring to reality their business ideas and get registered to have a prosperous business.
This exponential growth has impacted the economy which was in a slump a few months back due to a lack of business operation.