According to the Companies Act 2013, a private limited company is a company that restricts the transfer of its shares and limits the number of its members. Simply speaking, a Private Limited Company is a business entity held by a small group of people. It is owned by a group of members called shareholders. If you’re planning to open a private limited company and invest in the Indian market, you’ll have to register the same in accordance with the rules and regulations set by the Ministry of Corporate Affairs. Let us take a look at the procedure involved in the registration of private limited company.

What are the requirements?

  • At least two shareholders (foreign or resident of India) are required to incorporate a Private Limited Company in India.
  • At least two directors are required. Among the two directors, one should be a resident in India who has been staying in India for more than 182 days in the previous year.
  • Foreign Investment is allowed in the Industry as per the regulations.
  • Foreign investment which comes in India must be reported to the Reserve Bank of India (RBI) after the company is established.


Digital Signature Certificate (DSC):

For all the personnel involved in the private limited, a Digital Signature Certificate (DSC) has to be obtained. Since all the filings will be done online, the digital signature, along with valid address proof, is mandatory. The Ministry of Corporate Affairs has set up guidelines for filling e-forms on the online portal of MCA, including the filing of the registration form. This Digital Signature Certificate, commonly known as DSC, is valid for 1 or 2 years.

Shareholders involved are required to file e-MOA and e-AOA (will be discussed later in the article) by attaching their DSCs, whereas directors need to obtain their Director Identification Number (DIN).

Director Identification Number (DIN):

The Ministry of Corporate Affairs (MCA) assigns a unique number to individuals who apply to be directors of a private limited company. This number is permanent unless it is surrendered or withdrawn. The directors need to obtain the same and incorporate the DIN in the registration of a Private Ltd company. This is why DIN is necessary to be the director in any company. In order to apply for the DIN, you need a passport size photograph of the applicant, self-attested address proof of the applicant, and a self-attested PAN number of the applicant.

Company Name:

Choosing a name for your company is equally important that all the other documentation. A name is going to be attached to you and represents the brand value of the company. Thus, it would be best if you made sure that the name of the company is as per your values and vision. Besides these moral practices, you need to check the availability of the name and trademark availability at the MCA website. A web form named RUN (Reserve Unique Name) is used to submit the application. The applicant has to give two alternate names suggestions for name approval. The applicant is also given one chance to re-submit the application if none of the names is approved. Once approved, the name is reserved for 20 days. Now the applicant has to complete the incorporation process.

MoA, AoA and some important documentation:

The documentation is a very important part of the registration of the company. Documents like the Memorandum of Association (MoA) and Article of Association (AoA) which define the working of a company and its internal rules and regulations, are to be drafted with utmost precision and submitted along with the registration form.

The company needs to mention its main business activities in the MOA, and it cannot indulge in any other activity than mentioned in the MOA.

In the Article of Association (AoA), three specific clauses are mentioned in addition to other general clauses.

  • The maximum number of members is restricted to up to 200.
  • Transfer of shares is prohibited.
  • and accepting securities from the public is restricted.The maximum number of members is restricted to up to 200.
  • Transfer of shares is prohibited.

Apart from MoA and AoA, the latest passport size photograph and self-attested copy of PAN cards of the directors and shareholders are required. Foreign nationals need to provide a copy of their passport. Apart from these, providing basic documents (and forms) such as identity and address proof of the shareholders, directors, and the business is a must.

Certificate of Incorporation:

After reserving the name of the company, the Certificate of Incorporation will be issued to the applicant. A certificate of incorporation is a license for the formation of a company or corporation and denotes the formation of a company. The Certificate of Incorporation (CoI) issued will include the date of incorporation as well as the Permanent Account Number (PAN) of the company. Online registration applications for the company also requires online submission of Simplified Proforma for Incorporating Company Electronically, i.e. SPICe forms.

Other documents with the application:

  • NOC and Utility Bill from the owner/landlord for the registered physical office space for the company.
  • A consent to act as a Director of the company
  • Affidavit and declaration by shareholders and director(s) in form INC – 9
  • Self-attested Identity proof.
  • Paying the required government fees and stamp duty as applicable in the case of the concerned state on the portal.
  • The application and allotment of PAN and TAN are also processed with the same application.

With the Certificate of Incorporation, the private limited company is formed and remains functioning as long as the annual compliance is met regularly as guided by the regulations. Registering a private limited company is a thorough process that requires precise knowledge of the regulations set by the Ministry of Corporate Affairs. It is advised to consult a professional before filing out the important documents and the application form.