Private Limited Company
Private Limited Company
What is a Private Limited Company?
A Private Limited Company (PLC) is one of the most common types of legal entity in India. Private Limited Companies are governed by the Companies Act, 2013 and require a minimum of 2 Directors and 2 Shareholders with one of the
Directors being an Indian Resident and Indian Citizen.
To register a company in India, the following are minimum requirements:
- 2 Directors – 1 Person should be an Indian National and Indian Resident
- 2 Shareholders – The Directors can be shareholders
- Registered Office in India
100% Foreign Direct Ownership (FDI) is permitted in most sectors in India and there is no restriction on foreign shareholding of a private limited company. Hence, most foreign subsidiaries are established in India as private limited company.
Capital Required to Start a Company
A company can be started in India with a very minimum amount of capital. There is no fixed amount and the shareholders of the company being incorporated can determine the capital they wish to contribute. While setting up the capital structure of the company, the following are some of the concepts to be kept in mind:
Face Value of Share: The face value of a share is the price per share with which the company is incorporated. Normally, the face value of share is Rs. 1 or Rs. 10 or Rs. 100 or Rs. 1000 or Rs. 10,000.
Authorized Capital: Authorized capital is the total value of shares a company can issue to shareholders. Normally, all companies are incorporated with an authorized capital of Rs. 1 lakh or Rs. 10 lakhs. If a higher authorized capital is required, the company would be required to pay additional fees to the Ministry of Corporate Affairs. The authorized capital of a company can be increased at any time after incorporation.
Paid-up Capital: Paid-up capital of a company is the number of shares issued to shareholders for which they have paid or deposited money to the company. Paid-up capital of a company cannot be more than the authorized share capital of the company.
Steps to form a Private Limited Company:
Step 1: Obtain Digital Signature Certificate (DSC)
Step 2: Obtain DIN
Step 3: Name Availability*
Step 4: Form SPICe+ INC-32
Step 5: e-MOA and e-AOA
Step 6: PAN and TAN Application
