Private Limited Companies have been the preferred choice for Startups looking for funding as they are the only structure that Investors fund. OYO, Ola, Flipkart etc. are all Private Limited Companies.
Recently, the Income Tax on Private Limited Companies has been reduced to 22% which is 8% Lower than LLPs. The Income Tax is further less (Only 15%) if you are into manufacturing! Moreover, the extra Dividend Distribution Tax (Almost 20%) has also been abolished recently making a Private Limited Company even more attractive!
You can contact us here to set up a Private Limited Company!
In this article, we have enlisted the entire process of ‘How to Set up a Private Limited Company in India’. This article also includes a Bonus at the end!
The process to set up a Private Limited Company is the same PAN India. It takes around 5-7 days to set up a Private Limited Company and the process to set it up is completely online. We have described the process below: –
1. Name Application: –
This is the first step to set up an LLP. You need to file a name application using the ‘RUN’ form. Prior to filing the name application, you need to do a proper name search to ensure that the name of your Private Limited Company is not similar to an existing Company/LLP or to an existing trademark.
2. Incorporation of the Company
Once the name for your Private Limited is approved, you need to file for the Incorporation of the Company in the SPICE form. This form contains the details of the Shareholders/Directors of the Company, the address of the Company, and information about the business of the Company. This form is also used for allotment of Director Identification Number (DIN) to Directors and for PAN & TAN Application of your Company. Once the form is approved, your Private Limited Company will be incorporated!
It takes around 5-7 days to set up a Private Limited Company and the process to set it up is completely online
On the face of it, the set up process of a Private Limited Company looks like a Two Step process, but there are many other steps involved
After Step 1, you need to apply for the Digital Signature for all Shareholders, draft the Memorandum and Articles of Association (MOA and AOA), and arrange various documents like NOC’s and declarations required to form your Company (Phew!)
The ROC/Government has continuously strived to reduce the time taken to set up a Private Limited Company. Earlier, it used to take 60 days (minimum) to set up a Private Limited Company but now the process is reduced to 5-7 days. Those days aren’t far where the entire process will just take less than an hour! These changes will surely boost India’s rank in the ‘Ease of Doing Business’ ranking of India.
All the best for your Business!
Bonus:- We have added the documents required to form an LLP in India below!
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Documents required for Registration of a Private Limited Company
I) Documentation Required For Shareholders and Directors
a. Signed Digital Signature Form. (Only for Shareholders)
b. PAN Card.
c. ID Proof (Any one of the following- Passport, Election Card or Driving License)
d. Address Proof (Any one of the following- Bank Statement, Electricity Bill, Telephone Bill or Mobile Bill ) (Should not be older than 2 months and should be in the name of the person)
e. Passport size photo
f. Scanned Form INC-9 and Form DIR-2(A small Form which needs to be printed and signed)
** Note: Separate Documents are required if the Shareholder/Director is a Foreign National/Foreign Company/NRI
II) For Registered Office Address (Note: You can start a company from a Residential Address as well!)
IF the Premises IS taken on Rent/Lease by the Company.
a. Scanned copy of Lease Deed/Rent Agreement.
b. Scanned copy of any one of the Latest Electricity Bill/Telephone Bill/Gas Bill (Not older than two months)
2. IF the Premises IS NOT taken on Rent/Lease by the Company.
a. Scanned copy Letter of Consent from the Owner of the Premises
b. Scanned copy of any one of the Latest Electricity Bill/Telephone Bill/Gas Bill (Not older than two months)
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