What is the minimum number of persons required to register a company?

A minimum of two persons is required to register a Private Limited Company.

What is the difference among stakeholders, shareholders, managers and directors?

A stakeholder can be anyone who has an interest in the business and may be affected by its activities, such as government, customers, shareholders, employees, suppliers or creditors. Shareholders contribute capital, hold shares and own the company. Directors and managers are responsible for managing and running the business operations.

Private Limited Company Registration / Formation

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Who is required to register a Private Limited Company

In case there are more than one person and willing to do a business jointly, then the Private Limited Company registration may be a good idea. However there are other forms of business entity may also be preferred over registering the Private Limited Company.
In case there is a business requirement to register a Private Limited Company. For example, in case if it is the planning to avail the benefits of Startup, that are offered to Startups by the Govt of India, then one need to Register the Private Limited Company.
In case the client base is Corporate or the Foreigners/ Foreign Companies, then it is preferable to Register the Private Limited Company.
To attract the Venture Capitalists

Advantages of private limited

Q: Is it mandatory to file income tax return for a Private Limited Company?

Yes, it is mandatory. A Private Limited Company is required to file ITR-6 irrespective of income or loss.

Q: What is the tax rate for a Private Limited Company?

The tax rate may be 15%, 22%, 25% or 30%, subject to the applicable conditions under the Income Tax Act.

Q: Can a non-resident or foreigner be director and shareholder in a company?

Yes, a non-resident or foreigner can be appointed as a director and shareholder in a company, subject to applicable legal and compliance requirements.

Lowest Tax Rate

In comparison to other entities such as Partnership or LLP, the Private Limited company enjoys the lower tax. The company may have tax rate of 22% or 25% or 30% depending upon various factors. However the Partnership or LLP have the fix tax rate of 30%.

Limited Liability

The liabilities in company are limited to the amount of investment. So in case there is any unfortunate event in the company, the shareholders can not be held to contribute or compensate the same. However the same is not in other forms of business.

Transparency

A Private Limited Company is governed by The Companies Act, 2013 thus the transparency of a company is always high, making it attractive for Venture Capitalists to Invest and Others to business with.

Existence

The Company runs in perpetuity, the demise of shareholders does not affect the existence of the company, the legal owners acquires the title in shares and can continue.

Security

By registering a Private Limited Company, one can secure its business name to be copied. It is not the Trade Mark, however if we own a company with a name, no other can register the company with the same name.

Documents Required

Copy of PAN Card of all proposed Directors and Shareholders

Voter ID/DL/Passport of all proposed Directors and Shareholders. In case Passport is there, the Passport should be given.

Utility Bill/ Bank Statement of all proposed Directors and Shareholders for residential proof which should not be older than two months.

Passport size photograph of all proposed Directors and Shareholders.

Digital Signature Certificate(DSC) is required of all proposed Directors and Shareholders.

Copy of Electricity Bill for Registered address of the company

Passport size photograph of all proposed Directors and Shareholders.

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PROCESS OF FORMATION OF PRIVATE LIMITED COMPANY

NAME APPROVAL

The first step is to get a name approved from MINISTERY OF CORPORATE AFFAIRS.

DIGITAL SIGNATURE CERTIFICATE

Get the DSC prepared of all proposed director and shareholders .

FILLING OF INCORPORATION FORMS ONLINE

Fill all the required details on the form mentioned below-

• SPICE+

• SPICE MOA

• SPICE AOA

• AGILE PRO

• SPICE INC

SUBMISSION OF DOWNLOADEDFORMS

Now upload all the forms by using following path-

Mca services

e-filing>upload e forms

normal forms

linked forms> add more links

browse the forms> upload>make payment

download the generated paid challan

Compliances After Incorporation of Company

Auditor must be appointed by board of directors within 30 days of incorporation, if BOD fails to appoint then shareholders may appoint the Auditor within further 90 days.(e-form ADT-1 for auditor appointment)

This form is known as Declaration for commencement of business. It is mandatory to be filled by directors of the company within 180 days of incorporation. This form is a proof of depositing the subscription money in bank A/c by its shareholders.
Attachment for INC 20A:- BANK STATEMENT OF COMPANY

Format- FOR XYZ PRIVATE LIMITE

                                          DIRECTOR NAME
                                                       DIRECTOR
                                           (DIN:- XXXXXXXX)

Open the Bank Account( Current A/C) for company as soon as possible. Ideally it should be done in a month time

Company is required to affix a board which contains the details such as Name of company, GSTIN(if any) , registered address, CIN, E-mail address, web address, Contact No.

Conclusion :

One should understand the registering a Private Limited Company is great responsibility because now the Companies Act 2013 is governing it and the process does not ends after getting the Certificate of Registration, but there are compliance that needed to be followed even after the formation of the company.

FAQs

Minimum Number of Persons required to register a Company ?

Minimum no. of person is Two

Is it mandatory to file income tax return for a private limited company?

Yes, it is. ITR 6 is to be filed irrespective of amount of income or loss

What is the difference among stakeholders, shareholders and manager and director?

Stakeholder can be anyone who has interest in the performance of the business and can be affected by any activity of the company

(Government, media, customer, shareholder, employers, suppliers, creditor)

Shareholders, give capital to a company,hold the share and own the company (Equity shareholders, preference shareholders)

4. What is the tax rate for a private limited company?

It is 15%, 22%, 25%, 30% subject the certain conditions as laid down in Income Tax Act

5. Can Non Resident or Foreigner be director and shareholder in Company?

Yes, A Non Resident or Foreigner can be appointed as director and shareholder in the Company