Q.1 What is the meaning of a Private Limited Company?
A Private Limited Company is a small company that is handled by a group of people privately. The liability of the members of a Private Limited Company is limited to the number of shares respectively held by them. Shares of Private Limited Company cannot be publicly traded.
Q.2 Is it possible for a small firm to register as a private limited company?
Yes, a small firm can register with the Indian government as a private limited company. It gives them credibility and a positive image of their company in the eyes of suppliers, future customers, and financial institutions. It assists the organization in obtaining loans with minimal compliance from banks or potential clients when going into contracts.
Q.3 Which is better Limited Liability Partnership or Private Limited Company?
Private Limited Company is the simplest and a very popular form of Business Registration in India. It can be registered with a minimum of two people. Limited liability protection to shareholders, ability to raise equity funds, separate legal entity status make it the most recommended type of business entity for millions of small and medium-sized businesses that are family-owned or professionally managed.
When partners have limited liability at that time it is termed as Limited Liability Partnership (LLP). LLP is basically a combination of both Company and Partnership. It is an alternative form of business registration in India that is generally preferred by Professionals, medium and small-scale businesses. Limited It is governed by LLP Act, 2008 and as per the LLP agreement formed at the time of Incorporation
Q.4 What are the documents required for the Private Limited Company Registration?
- Photograph of all the Directors
- PAN Card of all the Directors
- ID Proof of all the Directors (Driving License/Passport/Voter ID)
- Electricity Bill or any other utility bill for the address proof of the Registered Office
Q.5 What are the benefits of a Private Limited Company in India?
Amongst many followings are few advantages of Private Limited company:
- There is a Limited risk to personal assets in Pvt.Ltd.Co.
- Pvt. Ltd. Co. is a Separate Legal Entity.
- In a Private Limited Company, there would be Limited Liability on members.
- Shares of a company limited by shares are transferable by a shareholder to any other person. The transfer is easy as compared to the transfer of an interest in a business run as a proprietary concern or a partnership
- Just as one person can bring a legal action in his/her own name against another in that person’s name, a company being an independent legal entity can sue and be sued in its own name.
- A company has ‘perpetual succession’, that is continued or uninterrupted existence until it is legally dissolved.
- For a private company, the earlier minimum number of the share capital was Rs. 1,00,000, but now there is no such minimum compulsion. Therefore, there is no pressure on fund requirements.
- It’s easy to fetch funding in a private limited company by transferring shares.
Q.6 What is the minimum turnover and capital required for Pvt.Ltd.Co. in India?
There exists no bar on turnover or capital in a private Limited Company, unlike One-person Company
Q.7 Can one person start a Pvt. Ltd. Co. in India?
Minimum two directors are required to incorporate a private limited company. Companies Act, 2013, has introduced the concept of One Person Company (OPC) private limited, in which a single individual can start a private limited company. Thus, if you plan to incorporate OPC, you can incorporate it with only one director.
Q.8 How much tax does a Private Limited Company Pay?
- Private limited companies with a total turnover of less than 400 crores during the previous year are taxed at 30% of total income.
- Private limited companies with a total turnover of more than 400 crores during the previous year are taxed at 25% of total income.
- In addition to income tax, a private limited company is also liable to pay income tax surcharge, education cess, and secondary and higher education cess.
Q.9 What are the minimum requirements to register a private limited company?
To register a Private Limited Company following are the minimum requirements:
- There need to be minimum 2 members to act as shareholders
- It needs to have a minimum of 2 directors
- It requires no minimum share capital to register a Private Limited Company
- From the above 2 directors at least one should be an Indian Resident.
- The person should mandatory hold a PAN card
- The person should carry a valid Id and Address proof in his own name.
- He should have a registered office space in India.
Q.10 Is registration necessary for Private Limited Companies in India?
Yes, Registration for a Private Limited Company is necessary as, without registration, there can be no existence of a company.
Q.11 What are the terms and conditions to use Pvt Ltd with the name of any organization?
The only condition to use “Private Limited” as a suffix with any organization name is to have the organization incorporated/registered / or converted to a Private Limited Company.
The organization must be registered as a Private Limited company with ROC (Registrar of Company) in India.
It is mandatory for all the companies which are registered as a Private Limited Company, to use Privately Limited as a suffix at the end of the company’s name.
Q.12 What is the ROC compliance for a Private Limited Company?
Here are mandatory ROC compliance for a Private Limited Company:
- Form ADT 1: First Auditor of the company shall be appointed by the BOD within 30 days of Incorporation who shall hold the office till the conclusion of 1st AGM.
- Form MGT 7: Form MGT-7 must be filed by all companies registered in India every year. It is an electronic form provided by the Ministry of Affairs to all the corporations in order to fill in their annual return details. The due date for filing MGT-7 is within 60 days from the date of the Annual General Meeting.
- Form AOC 4: Every Private Limited Company is required to file its Balance Sheet along with a statement of Profit and Loss Account and Director Report in this form within 30 days of holding of Annual General Meeting.
The above forms need to be certified by CA/CS/CWA.
Q.13 As per Indian law, How many maximum directors can a Private Limited Company have?
As per Indian law, The Indian companies Act, 2013 states that A Private Limited Company in India can have a minimum of 2 directors and a maximum of 15 directors.
Q.14 What are the document required to add a director in a Private LTD company?
To add a director to a Private Limited Company, all you need is three things:
- A valid Digital Signature Certificate (DSC)
- Director Identification Number
- A Consent letter from the proposed director.
Q.15 Is an audit mandatory for a start-up Private Limited Company?
- Be it a Start-up or an established Private Limited company, It is mandatory compliance to have the company’s account audited.
- Even the appointment of an auditor within 30 days of the incorporation is mandatory compliance for a Private limited company.
Q.16 What are the minimum requirements to register a Private Limited Company?
To register a Private Limited Company, the following are the minimum requirements:
- 2 Directors, one of which has to be an Indian resident and an Indian Citizen.
- 2 shareholders who can be a natural person or a legal entity.
- There is no requirement of minimum share capital to start a company. A company can be registered even with 10,000/- Rupees.