What are the prerequisites to incorporate a Private Limited Company?

The prerequisites for the incorporation of a private limited company are that: The number of members must be between 2-200. There must be at least two directors and two shareholders Each director must have a Directors Identification Number (DIN) PAN card copy of directors/shareholders. Passport copy for NRI subscribers.

Can the private company be incorporated with a residential address?

Yes. The company needs to provide address proof for incorporation. But the Ministry of Corporate Affairs (MCA) allows a residential address to be used as the company's registered address. Thus any address can be provided as the registered address.

What is the authorised capital for the Private Limited Company?

Authorized capital is the maximum value of equity shares that can be issued by a company. On the other hand, paid-up capital is the number of shares issued by the company to shareholders. Authorised capital can be increased after incorporation at any time to issue additional shares to the shareholders.

What is required to start a Private Limited Company?

To register a private limited company, a minimum of two people are required to act as directors and shareholders. The directors must be natural persons, while the shareholders can be natural persons or corporate entities. Besides, a registered office address in India is also required for company registration.

Can NRIs and foreign nationals or foreign entities register a company?

Yes, NRIs, foreign nationals and foreign entities can register a company and invest in India, subject to the Foreign Direct Investment norms set by the RBI. However, incorporation rules in India require one Indian national to be a part of the company on the Board of Directors.

Benefits or Advantages of Private Limited Company(PLC)

By Online Legal India Published On 27 Feb 2021 Updated On 06 Jan 2023 Category Private Limited Company

Setting a Private Limited Company is one of the highly advised to start a business in India. This type of company offers Limited Liability to its shareholders with certain restrictions placed on the ownership.

Therefore, for an instance in a Limited Liability Partnership has partners, who own and manage the business. Whereas in Private Limited Company registration, directors may be different from that of shareholders.

Private Limited Company(PLC): Benefits or Advantages

No Minimum Capital: A Private Limited Company can be registered with a mere sum of Rs. 10,000 as total Authorized Share capital and No minimum capital is required to incorporate a Private Limited Company.
Separate Legal Entity: A Private Limited Company is a separate legal identity in the court of the law, meaning assets and liabilities of the business are not the same as the assets and liabilities of the Directors. Both are counted as different.
Limited Liability: If the company undergoes financial distress because of whatsoever reasons, the personal assets of members will not be used to pay the debts of the Company as the liability of the person is limited.
Fund Raising: A Private Limited Company in India is the only form of business except for Public Limited Companies that can raise funds easily.
Shares can be easily Transferred: Shares of a company limited by shares are transferable by a shareholder at any other person. The transfer is easy as compared to the transfer of an interest in a business run as a proprietary concern or a partnership.
Uninterrupted Existence: A Private Limited Company has ‘Perpetual Succession’, that is continued or uninterrupted existence until it is legally dissolved.
FDI Allowed: In a Private Limited Company, 100% Foreign Direct Investment is allowed that means any foreign entity or foreign person can directly invest in a Private Limited Company.
Builds Credibility: The particulars of the company are available on a public database. This improves the credibility of the company as it makes it easy to authenticate the details.

How can we help you?

If you too are wondering to set up a Private Limited Company, the Online Legal India™ expert team can take care of the documentation process. We have a highly qualified CA/CS and 10+ years of experienced lawyers who would assist you to Register your Private Limited Company(PLC). We have budgeted services for those who are willing to venture into a company, business or any other kind of organization.