Private limited company is a company which is privately held for small business. It is formed under the Companies Act 2013.

The liability of the members of a private limited company is limited to the amount of shares held by them respectively. Private limited company shares cannot be traded publicly. Private limited company should have a minimum paid up capital of 1 lakh rupees or such higher amount as may be fixed from time to time. It is mandatory for private companies to use private word after their name. A private limited company is less complex than a public company. It is comparatively less expensive and less time consuming. A minimum number of two directors are required for registering the private limited company. Each of the directors should have DIN. Under the Companies Act 2013, a private limited company must have a minimum of 2 members and a maximum of 200 members.

The following are not included in Members Limit

  • Person who is an employee of the company and also member of the company.
  • People who were earlier employee of the company and were also members of the company while in service and even after leaving the job, remain members of the company.
  • When two or more persons jointly take one or more shares of the company, then they are considered to be the same member.


Apply for DSC & DIN

Step-1 First of all, the partners have to apply for digital signature and DIN.

Apply for the Name Availability

Step-2  You need to provide 3 different options for your company name to MCA of which one will be selected. Name provided should ideally be unique and suggestive of company business.

File the MOA & AOA

Step-3 Once name is approved, one need to draft memorandum of association and articles of association, MOA & AOA are filed with the MCA with the subscription statement.

Certificate of Incorporation

It typically takes 15-25 days to from a private limited company and get the Incorporation certificate. Incorporation Certification is a proof that company has been created.

Apply for PAN, TAN & Bank Account

Then you need to apply for PAN and TAN, PAN and TAN are received in 7 working days. Post this you can submit the incorporation certificate, MOA, AOA, and PAN, with a bank to open your account.

Documents Required for Company Registration

·         Copy of pan card of directors

·         Electricity /Water bill (Business Place)

·         Passport size photograph of directors

·         Copy of property paper (if owner property)

·         Copy of Aadhar card/ voter identity card of directors

·         Landlord NOC (format will be provided)

·         Copy of rent agreement (if rented property)

·         Past six month current bank statement of members

Minimum Requirement of Company Registration


A minimum number of two directors is required for registering the private limited company. Each of the directors should have DIN i.e. director identification number which is given by the ministry of corporate affairs. One of the directors must be a resident of India which means he/she should have stayed in India for not less than 182 days in a previous calendar year.


It is one of the major components of a private limited company. It is necessary for all private companies to use the word private limited company at the end of its company name. Every company has to send 5-6 names for approval to the registrar of the company and all the names should be unique and expressive. The name for approval should not resemble with any other companies name. So choosing the right company name is an important component is it will stay with the company throughout its life.

Registered office Address

The registered office of the company is where the company’s main affairs are been conducted and where all the documents are placed. While going for the registration of the company, the owner should provide the temporary address of the company until it does not get register.

Obtaining a Digital Signature Certificate

Every company must obtain a digital signature certificate which is used to verify the authenticity of the documents. A digital signature obtained by all the director which are marked all the documents by every director.

Paid up Capital

The Companies Act 2013 mandated that all private limited companies will have to keep a minimum paid up capital of Rs 1 lakh. This provision meant that Rs 1 lakh worth of money have to be invested in the company by purchase of the company’s shares to start business.

Professional Certificate

A company there are many professionals which have required for many purposes. For incorporating a private limited company certification by these professionals are necessary. Various professionals such as company secretary, chartered accountant, cost accountant, etc are required to make their certification at the time of company incorporation.

Advantage of Private Limited Company

Equity Raise

A company can raise capital from persons or entities interested in becoming a shareholder.

Limited Liability Protection

A private limited company provides limited liability protection to its shareholders. In case of any unforeseen liabilities are create it would be limited to the company and would not impact the shareholders.

Separate Legal Entity

A private Limited company is legally recognized as a separate entity. Hence a company can have its PAN, Bank accounts, Approvals, Contracts, Assets and liabilities in its unique name.

Restricted Trade of Shares:-

This is an advantage to some shareholders because shareholders who want to sell their share cannot sell them to outside buyers. Shareholders must also agree to the sale or transfer of shares. The risk of hostile takeovers is low.

Continued Existence

Another advantage of a private limited company is its continued existence, even after the owners die or leave the company. A private limited company differs from a sole proprietorship in that the latter is owned by a single individual who is personally responsible for the business debts and essential to its continued existence.

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