Incorporated Company
Incorporated company in india is based on the provisions stated in the Companies Act 2013, which illustrates a company as the involvement of persons built to conduct business. A company has a separate legal unit different from its members who form it.
There are numerous kinds of the company according to the business activity undertaken, like public limited companies, private limited companies, service companies, manufacturing companies, charitable companies, one-person companies, Non-Banking Financial companies (NBFC), and government companies.
Companies and startups who have huge growth objectives prefer the incorporation of a pvt ltd company to set up a business in India.
A minimum of two shareholders/subscribers and directors are needed for company registration in india.
A person might have the positions of director and shareholder in a pvt ltd company registration. Also, the unpaid shares limit his obligation as a member or shareholder of a private limited company.
Why is there a need for an incorporated company?
- Privacy
- Tax savings
- Long-lasting duration
- Liability protection
- The reliability of the business
- Ownership transfer
- Ease of increasing capital
What perks do a Pvt Ltd company registration have?
- Employing a Woman director is not obligatory for private companies.
- Selecting an independent director is not compulsory for private companies.
- The provisions regarding the rotation of directors are not pertinent to Pvt Ltd company registration.
- The composition of an Audit Committee, Remuneration Committee, or Nomination Committee is discretionary for the incorporation of a private limited company.
- Private firms do not need to clear their securities or shares.
- The maximum ceiling on managerial reimbursement does not apply to private companies.
- Pvt Ltd company registration does not require the appointment of a secretarial auditor.
Advantages of an incorporated company in india
1. Builds capital
Capital is the money required to generate goods and services. A company has two kinds of acquiring capital: equity, which denotes raising funds via the public, and debt, implying bank loans or any sort of credit. When there is the incorporation of a private limited company, it is more reliable, so it is simple to get capital.
The SEBI and other associated laws necessitate the company's incorporation to enable sourcing funds in the equity form.
2. Separate unit
A company is an individual legal unit to the subsequent stakeholders:
Promoters: People who commenced the company setup
Directors: People who manage the company and direct its business
Shareholders: People who hold the company
The characteristics of this concept are:
- The company can buy, sell, and possess the property.
- The company can take legal action and be prosecuted in its name.
- From the law perspective, a private limited company has separate liabilities and assets of the company compared to the directors and stakeholders.
3. Limited liability
Members are liable to pay till the level of their undischarged liability for incorporation of a private limited company. For a company limited by shares, liability is restricted to the amount not paid on its shares. On the other hand, for a company limited by a guarantee, the liability will be just the amount the members decided to guarantee. For instance, a person bought ten shares of 100 INR each. So, his maximum liability will be 1000 INR only.
In the case of private limited companies, members and shareholder cannot use their assets to reconcile the company's debts for any financial crisis.
4. Share transferability
Shares are proportionate with a movable property and can be effortlessly transferred from one person to another for company registration in india. This factor gives liquidity to the shareholders. The share transfer is not often as the private limited company is closely-held.
5. Efficiency and Expertise
As ownership and management are different, professionals in the field can be appointed for every function of an incorporated company. This aspect directs to enhanced liability. The accessibility of resources makes it favourable to proffer great salary packages and draw apt talent accessible in the market.
6. Funding
A private limited company may import equity share capital from organizations or individuals who are willing to become shareholders of the company and preference shares. Investment groups, investment firms, private equity firms, banks, venture capital companies, and other funding sources are accessible to private limited company incorporation in india.
What are the essentials for Pvt Ltd company registration in india?
1. Distinctive company name
The intended company name should be distinct and original, not equivalent to the name of an existing business, registered trademark, or LLP.
2. Minimum 2 Persons or shareholders
A minimum of 2 persons should generate a private limited company, and at least one director must be an Indian resident. These persons will be the company's shareholders and directors.
3. Capital Needed
A minimum quantity of paid-up capital is not mandatory to build a private limited company. Investment should be on the basis of business requirements.
The procedure of Private Limited company incorporation in india
1. Application for Filing of Name Reservation
A private limited company name reservation application should be submitted in the RUN form and pay a government fee of 1000 INR.
In the form, apply for a maximum of two names. If the names are exceptional and are not similar or the same as any present company names, trademarks, or LLP names, the MCA will reserve them for twenty days, and if it is the same, then you need to submit the RUN form.
Nevertheless, send one name directly in the SPICe-32 form. This alternative works only if the applicant is sure that the filed name is original and not like a trademark, present company, or limited liability partnership.
2. Obtaining Digital Signature Certificate
After approving the proposed company's name, the following stage is to gather DSC from every proposed first subscriber and director.
3. Documentation for an incorporated company
Documents for developing a private limited company are according to the KYC documents and other info from potential subscribers and directors.
4. Incorporation Issue certificate
You should verify the filed forms and their attachments from the Registrar. If the filed forms are proper and fulfil the requirements of Companies 2013 and any regulations related to company registration, he will issue an Incorporation Issue certificate.
Final Thoughts
Seeking help from an expert is an easy way for Pvt Ltd company registration. The Indian Companies Act of 2013 imposes the directors and shareholders to file annual reports and other paperwork according to the company's needs to uphold the company's active subsistence after online registration.
If you are stuck anywhere to incorporate your private limited company, reach out to Lawgical India. Our team of experts handles every process very diligently and comprehends your requirements quite well.
