Private Limited Company Registration

  • Requires minimum Two Shareholders and Two Directors. Mostly they are the same persons in both roles.
  • Can have a Corporate Legal Entity as its shareholder.
  • Foreign nationals/NRI/Foreign Corporate Entity can be the Directors/Shareholders with Foreign Direct Investment (FDI).

Important points to be noted for Startups

  • Can raise equity funds and is a popular form of entity for start-ups looking for Venture Capital (VC) funding or Private Equity (PE) funding.
  • Sought after model for start-up funding by Government funds.
  • Tax Exemption: Income Tax exemption for a period of 3 consecutive years and exemption on capital and investments above fair market value.
  • Easy winding up of company: In 90 days under Insolvency & Bankruptcy Code, 2016.
  • Startup Patent Application & IPR Protection: Fast track patent application with a rebate up to 80% in filing patents.
  • Easier Public Procurement Norms: Exemption from requirement of earnest money deposit, prior turnover and experience requirements in government tenders.

SIDBI Fund of Funds: Funds for investment into startups through Alternate Investment Funds

List of Documents required

  • PAN & Aadhaar of proposed partners (Self attested).
  • Identity Proof (Any One): Passport/Voter ID/Driving License.
  • Residence Proof, should be the latest month (Any One): Bank Statement/Electricity bill/Telephone bill/Mobile Bill.
  • One Passport size photo of all partners.
  • Registered office address Proof: Electricity bill of the latest month in the name of the owner.
Frequently Asked Questions

1. Can the Director be salaried in another Company?

Yes, a Director can be salaried in another Company. However, one must make sure that the Company employment rules of that Company are adhered to.

2. Can an NRI start LLP in India?

Yes, Non-resident Indian or foreign national can start a Company in India.

3. Capital Requirement

There is no minimum Paid-up capital amount. A Private Limited Company should have an authorized capital of at least Rs. 1 lakh.

4. Compliance requirement

Income Tax filing in the name of the business has to be filed every year. The Companies should also file the Annual Returns with Registrar of Company every year, irrespective of having profits or losses. Hence, those companies that are dormant, with no transactions are also mandated to file returns with Income Tax Department and Registrar of Companies every year.

5. Commencement of Business

Companies registered post November 2018 and having a share capital are required to obtain commencement of business certificate before commencing any business or exercising any borrowing powers. The commencement of business certificate must be obtained within 180 days of incorporation of the company. Failure to obtain this certificate will lead to a penalty.