Private limited company
What does means a private limited company?
A private company is that company that is privately run by the owner as in this company all the capital is carried out by investors here the public shares are restricted completely. You have to pay the company expenses from your private earnings.
How to form a private limited company?
To form a private limited company.
You should have at least 2 directors then you should have your DIN number (Director identification number) as the further process is done by under C. As it is a complex process.
Lets Discuss in details :
The first requirement is the location that is your Business place.
If it is rented then a rented agreement is required.
If it is owned then property paper.
If it is leased the NOC is required.
One of the document according to the place is required while forming a private limited company. The second is you will require a CIN number that is a company identification number for that you will require an MOA and AOA. As you will get this from your C.A. Now after 15-20 days you will get the incorporation certificate through an email that is CIN. Then you have to apply for a trade license from your respective municipality or panchayat. After that create a current A/c where you should have at least paid-up capital of 1 lakh rupees. As to create a current A/c you will require all the documents such as incorporation certificate, PAN, Trade license MOA, AOA. Then you have to apply for professional tax registration or Good service tax registration. After registration, you have to complete the 5 compliance which comes in 1 year. If you failed to follow then you have to pay penalties which is huge.
Such as trademark registration.
Logo registration as for this 2- 3 years passes
How much does it cost to form a private limited company?
As the registration will also depend upon CA fees and paid-up capital.
As the general amount of expenses is 20000-25000.
Why a private limited company?
As there is no personal liability is taken for the loan as if Business faces the losses then to recover the loss all Business is assets are used. Personal assets are not used. Your Business name gets corporate identity and also it gains trust in the market. It is also useful while applying for a loan and also while raising fund such as fir seed funding from an investor. It also gives a confidence sense in the minds of your clients that is customer and your suppliers it also gives a trustworthy and confidence to the employees who are working under it.
The disadvantages are that you have to follow the rules which come by registering as a private limited company. And also you may bear double taxation as it is also a time-consuming process.
Rules to follow
Minimum 2 directors are required.
You should appoint an auditor.
Capital is required such as paid-up capital.
The company name should be unique and it should not be abusing any another community or another company.
A proper business place is required.
The document should be required such as MOM and AOA.
Limits of 200 members.
Prohibition is that you should not issue share from the public.
And one more rule is that when your paid-up share capital crosses 5 cr. above then you have hired these positions in the company such as CEO, MD, CS, CFO, Manager.
Be aware of these mistakes
DI: While applying for DIN take care that your given documents such as pan card and id proof should be matched properly as the different address should be on pan card and adhar card can create problems.
Take care of spelling mistakes also in your MOA documents and AOA documents.
Shortage of documents or unsubmission of proper documents may lead to disputes.As don’t do any kind of mistakes while writing a Business description.
Do not ignore the intellectual indies property. Do not avoid compliance.
To form a private company you should fulfill some conditions which are explained below as after forming the company you will enjoy some benefits also as at the same time there some drawbacks. As this registration is needed to run the company legally and also for the expansion of the company, if you didn’t follow then you have to pay the respective penalty which may cost so expensive for you.
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