The company that holds a private business entity is known as a private limited company. Private stakeholders have a private limited company. In this type of company, a shareholder's liability ranges only to the number of shares held by the shareholder. It is precisely similar to the limited partnership.

In today's scenario, with the growing business and new entity coming up, there is an increasing demand for private limited company registration. There are certain norms and regulations to be followed while registering a private company. The body called the Ministry of Corporate Affairs governs such companies.

Why will you open a private limited company?

● Membership – you will need a minimum of two people to start a private limited company. The maximum number of a member will be two hundred people. You will also need two directors to run this company.

● Limited liability structure – in this type of company, the liability of the entire shareholder will be limited to its share holing capacity.

● Separate legal entity – this company will be a separate legal entity. This suggests that if any of the members become insolvent or files for bankruptcy, the company is not affected. The company will remain active until it is declared dissolved by the resolution.

Minimum paid-up capital -

● Minimum capital has to be Rs one lakh. This can go higher from time to time.

Differentiate your company

As per the COMPANIES Act, the private limited company registration should meet specific rules. They are as following:

● Private ownership.
● Shares issued cannot be traded in public.
● Stakes are not issued through IPO.
Requirements to form a private limited company
● The number of people- Minimum two to a maximum of two hundred people can come together to form a private company.
● They will then submit an application to the Registrar of companies with a copy of the Memorandum of association.
● The Memorandum should specify the name of the company with the words "Private Limited."
● The address of its registered office,
● The document stating the objects and purposes of the company with the extent of liability of its members should be submitted to the office.

Document required to form a private company

After you have decided to start a private company, you will need to do a specific documentation process. The following documents will be needed:

● DSC (digital signature)
● PAN card
● Address proof
● Residence proof
● MoA (Memorandum of association)
● Articles of association

Steps to register a private limited company:

1. Firstly, you will have to finalize the name of the entity – it is essential to decide the name of the company, which describes the type of business it does. It is advisable to give at least five options as the name of ant two companies cannot be the same.
2. Then next step will be to apply for the digital signature certificate - as
3. Thirdly, you will have to use the director identification signature i.e. DIN -
4. Fourthly, your duty will be to check if the name is available – always give five or more options. Then select the available name and register it.
5. Then, you will have to file for EMOS and AMO -
6. Next step will be to apply for the PAN and TAN number of the company – you will need PAN card and TAN number for all the details and accounting purposes.
7. After the above step, you will receive the certificate of incorporation by RoC. You will also receive PAN and TAN.
8. You will need a bank account in the name of the company. – For smooth transactions, you will need a bank account in the name of the company.

After completing the above steps, you have completed the process of private limited company registration, and you are ready to start your business. If you want the above process to be smooth, it is very important to consult the right person or the company.

The cost of private limited company registration varies from 6000 rs to 30000/ rs. It depends on the number of directors, members, authorized share capital, and professional fees. The professional costs will depend on the types of documentation required. The above information will help you to the private limited company registration, making your process very easy and simple.

Author's Bio: 

PKG Management Consultancy established with the vision to provide a single window for complete business solution and awareness of statutory requirements. The Firm is promoted by a team of professionals including Chartered Accountants, Lawyers, and Management Professionals etc.