With adequate stability and growth opportunity, Private Limited Company is the most prevalent and popular type of corporate legal entity in India. For registering a private limited company, a minimum of two shareholders and two directors are mandatory. The company can be held by maximum 200 members at a time. It is a defined business with a defined objective.
The shareholders of a private ltd. company are said to be the owners, whereas the personnel managing day-to-day operations are called as directors.A natural person can be both a director and shareholder, while a corporate legal entity can only be a shareholder. Further, foreign nationals, foreign corporate entities or NRIs are allowed to be Directors and/or Shareholders of a Company with Foreign Direct Investment, making it the preferred choice of entity for foreign promoters.
Ability to raise equity funds, separate legal entity status and perpetual existence make it the most recommended type of business entity for millions of small and medium sized businesses that are family owned or professionally managed. A private limited company registration in India makes way for its separate legal existence, securing the owners’ personal assets such that the company’s survival remains unaffected by any change in shareholders or management. And since the private companies registered in India have its separate, distinctive existence so, any change in shareholders or management does not affect the survival of the company.
Benefits
Trouble-Free Fundraising
Due to tough registeration process, the pvt. Ltd. Companies are credible amongst others making fundraising or capital borrowing easy and hassle free from external sources. A number of ways such as private equity, ESOP etc. are provided by the organization itself to raise money.
Distinct Establishment
A PLC in India is a distinct establishment in the eyes of the law, separating it from its managers and owners. The company can run on its own by opening a bank account in its name. Through this account the company can own assets, enter into contract with parties and can also sue third parties in any case of default.
Discrete Management and Ownership
Discrete Management and Ownership help the company and the management to focus on the work. The shareholders assign responsibility to operate and run the company without losing control in the form of voting.
Uninterrupted Existence & Easy Transferarbility
A private ltd company is everlasting firm till it is legally dissolved. It is not affected by the death or departure of any of the partners. Change of ownership does not affect the working of a private limited company. The ownership of PLC is easily transferrable to another person inducting them as a partner.
Owner’s Limited Liability
The owner’s personal assets are uncharged from company’s obligations and debts. Their liability stays limited only to the capital subscribed and unpaid by them.
Documents Required
PAN Card
PAN Card of shareholders and Directors. Foreign nationals must provide a valid passport.
Identity Proof
Aadhar card and Voter ID/ Passport/ Driving License of Shareholders and Directors.
Director’s Address Proof
Latest Telephone Bill /Electricity Bill/ Bank Account Statement of Shareholders and Directors.
Photograph
Latest Passport size photograph of Shareholders and Directors.
Business Address Proof
Latest Electricity Bill/ Telephone Bill of the registered office address.
NOC from owner
No Objection Certificate to be obtained from the owner(s) of registered office
Rent Agreement
Rent Agreement of the registered office should be provided, if any.
Note
In case of NRI or Foreign National, documents of the partner must be notarized or apostilled.