As the ecosystem for entrepreneurship is booming around the world, anyone who wants to have a company of his or her own and is planning to cross the first threshold should know about the registration process in detail. A question might come: what is the process for the registration at the time ofCompany formation in India? Is it worthy enough to spend money to get hold of a registration certificate? Most start-up entrepreneurs either are ignorant of the legal safeguard that a registration certificate can provide, or they incline to show their utter callousness emanating from their ignorance. The purpose of this article is to inform those fresh entrepreneurs that Private limited company registration is not only risk-averse, but there are numerous benefits one can receive if his or her company is legally registered under the Companies Act, 2013.
What is a Private Limited Company?
The name is enough to suggest that a private limited company is nothing but a company whose shares are closely held. It works on a limited liability concept and the governing body responsible for the regulation of a private limited company is the Ministry of Corporate Affairs.
Characteristics of a private limited company
Any business executive, devising such a plan to start a company and in the ongoing process ofCompany formation in India should know some of the characteristics of a private limited company for better comprehension.
Minimum two shareholders are required to start a private limited company and being termed as a small entity, a maximum number of 200 persons can be incorporated as shareholders of that company. It is enforced under Companies Act, 2013.
Minimum paid-up capital
There is no minimum paid up share capital requirement under the law. A Private Company can be incorporated with minimum two rupees being the Authorised and Paid-up Share Capital.
Steps to form a private limited company
The company registration process undergoes several steps and following the steps thoroughly will give you an idea of the documents you need to form a Private Limited Company. The process is a bit difficult and complicated as well but the below-mentioned steps will clear all your confusion and help you to carry out the procedure with ease.
Our six golden steps of beginning your life as an entrepreneur. Let’s get started.
- Acquiring a Digital Signature
- Making an Application for Name Approval
- Filling Up of the Online Form SPICE + Part B
- Submitting Form Agile Pro
- Formulation of MOA and AOA
- Summing Up Everything
Benefits of Company formation in India with registration
Establishing acurrent bank account
Opening a current bank account requires the documents regarding registration and incorporation of a company in India under legal procedures. Opening a bank account for your private limited company is essential to separate your banking with that of your business. A proper registration certificate will make this arrangement more convenient.
A Company, newly formed, can have the requirement of funds anytime. So, the process does not end with the modus operandi associated with that Company formation in India. Rather it is the very start to push your business for growth and being a fresh entrepreneur and having no gigantic capital, loans are an indispensable component of boosting your business to a new level. In that case, your registration certificate is a pre-requirementto approach someone for loans.
Reputation with customers
Trust often stands out as a big issue in a business and the clients you are going to deal with for the first time, why should they trust you? The confidence of the customers will fall in place once you assure them by showing the registration certificate where the company name and other details registered with the Registrar of Companies ismentioned.It will provide your company with a legal base and in the future, it will attract more clients.
A Company formation in India will automatically attract tax liabilities and the taxes must be paid on time according to the government rule and prescribed tax slabs. But as most of the private limited company emerges as a small business entity, many benefits and advantages regarding taxes can be availed if the company is registered. The company can avoid double taxation if it is registered under the Companies Act, 2013. So, in any case, company registration is a must if you want to maintain a sustainable business structure in your organization.