To begin your own Private Limited Company you need a minimum of two directors and two shareholders. For being the director of the company it is essential for you to be a natural person, however, the shareholder can be a natural person or a corporate legal entity.
In case if any foreigner or any foreign corporate entity or NRIs wants to establish a company in India they can do it through Foreign Direct Investment which makes it very easy for the NRIs to invest in India and earn profits.
Know TheVarious Benefits of a Private Limited Company
- A Private Limited Company is a separate corporate legal entity, the company’s finances are separate from the owner’s finances.
- There are no personal liabilities to Limited company owners.
- The private limited companies can borrow money, raise funds and capital from the market without involving personal risk.
- They have a legal precedent to guide the various shareholders and the directors of the company.
- They have an unlimited life and their existence does not end after the death of the directors or shareholders.
- They are given certain relaxation on the taxes and they have to pay a little less corporation taxes.
- Easy transferability of the company can be done, by simply transferring the share to someone else.
- It is a mandate for the directors and shareholders of such a company to hold annual meetings and observe specific formalities.
- The procedure for registration of a private limited company is more expensive in comparison to sole trader or partnership.
- Such companies have to pay annual fees and have periodic filing obligations and various audits are to be done compulsorily.
- The owners however, have less control over the company unlike sole trader so that no compliance issue can be raised.
What Is The Procedure for Company Registration?
- Acquiring Director Identification Number (DIN)-This is the first step and each and every director of the company must have the Director Identification Number. To get this you need to file a DIR-3 form which is available on the site of the Ministry of Corporate Affairs.
- Acquiring Digital Signature Certificate (DSC) – To ensure the authenticity and security of documents and data, the Information Act 2000, says it is compulsory for all the documents submitted electronically to have a valid digital signature. This DSC is issued by only those agencies which are appointed by Controller of Certification agencies.
- Name Approval- You now need to apply for name approval in RUN form with the MCA portal. Name should be unique.
- Incorporate the Company- The last and the major step in the procedure of company registration after name reservation is to incorporate the company.
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