Why Private Limited Company is the recommended choice

A Private Limited Company is the recommended choice to make as the numerous advantages it offers for start-ups. This article will shed light on Pvt Ltd company registration procedure.

The crucial essential point for a Private Limited Company registration to keep in mind for startups are as follows:-

1. Private limited company shall have a minimum two directors.

2. maximum 200 and minimum 2 members are required in Private Limited Company

3. There is no requirement for minimum capital.

4. The Maximum number of directors necessary for Private Limited Company is 15.

5.  The registration document must be approved by a guardian or a parent on behalf If a member of a Private Limited Company age is under 18.

Advantages to register as a private limited company

1- legal identity

2-Ease of raising fund

3-Perpetual Succession

4-Limited liability

5-Taxation

6- Less Legal Compliance

7-Additional Credibility

Following are Step to register Private Limited Company for Startups:-

Step 1:- a Digital Signature Certificate:-

In Private limited company, A first step in the registration is Digital signature certificate. The digital signature certificate is also known as DSC which has the validity of 1 or 2 years that is issued by certifying authority.

Documents for Digital Signature:-

•    Passport size photograph of the applicant

•    Self-attested Address proof of the applicant

•    Self-attested PAN Card applicant

Step 2: Director Identification Number:-

Director Identification Number is also recognized as DIN is a  unique number assigned to the individual with lifetime validity by the Ministry of Corporate Affairs.

Document required for DIN:-

Passport size photograph of the applicant

Self-attested address proof of the applicant

Self-attested PAN Card of the applicant  

Step 3: Name Approval

After DIN and DSC are obtained, we can file the form for name approval. We have to mention minimum one name and maximum of six names for name approval.

Step 4: Company Registration and Incorporation:-

Some Documents and forms for ROC Filing that have to prepare for the further process. Then file the forms to ROC after getting name approval.

Conversion into a private limited company

•    There are two approaches for conversion of One Person Company to Private Limited. OPC conversion can be voluntary or mandatory. OPC can be converted into Private Limited after two years of setup, or if turnover is more than Rs 2 crore or paid share capital exceeds Rs 50 lakhs in a financial year but in both situations, a proper procedure is to be followed.

•     The sole proprietorship conversion to a private limited company is likely to incorporate a new private limited company then take over the old proprietorship firm by the new private limited company.

•    The conversion of Liability Partnership (LLP) into a private limited company is conducted for more growth in business or to introduce equity capital. An LLP can be modified into a Private limited company. However, there are several conditions that are necessary to satisfy before converting a Limited Liability Partnership into a Private Limited Company.

CONCLUSION

Private limited companies have multiple advantages which makes it a valid option for startups as well as for entrepreneurs a huge number of entrepreneurs would incorporate their entities to enter a startup-friendly Indian market which is expected in the coming years.