Requirements to start a Private Limited Company

Every business type has its own set of requirements before it is incorporated. The requirements for registering this are as stated below:

1. Members and directors

As mentioned above, to get itself legally registered, a private limited company must show a minimum number of two and a maximum number of 200 members. This is a statutory requirement as mandated by the Companies Act 2013.The directors should meet the following conditions:

• Each of the directors should have a 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 the previous calendar year

2. Name of the company

Private limited company is required to cover three aspects while deciding a name for itself:

A. Main name

B. Activity to be carried out

C. Mention of ‘Private Limited Company’ at the end

Pro tip: It is not always necessary that the name the business owner is looking for will be available, as no two companies can have the same name. Therefore, it is a requirement that at the time of registration, every company has to send 5-6 names for approval to the Registrar of Company (ROC). Moreover, the submitted names should not have a close resemblance with any other company’s name.

3. Registered office address

After the company has been registered, the permanent address of its registered office must be filed with the registrar of the company. The registered office of the company is where the company’s main affairs are being conducted and where all the documents are placed.

4. Obtaining other documents

• A private limited company requires to have and maintain a minimum paid-up capital of Rs. 1 lakh. It could go higher, as prescribed by MCA from time to time.

• Draft the company's Memorandum of Association and Articles of Association, outlining its objectives, rules, and regulations.

• Apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the company.

• Open a separate bank account in the company's name and deposit the initial capital.

• For electronic submission of documents, every company must obtain a digital signature certificate that is used to verify the authenticity of the documents. Moreover, in a company employing professionals (secretary, chartered accountant, cost accountant, etc.) for varied activities, certifications by these professionals is necessary.

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