Private Limited Company
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About Private Limited Company
A Private Limited Company is a type of business entity owned by a small group of people. It is mostly used for closely-held business purposes and owned by a group of members called shareholders. Most of the Indian Startups and businesses with higher growth aspirations popularly choose Private Limited Company as a better business structure.
It is an artificial judicial person having a separate legal entity distinct from the members who constitute it, capable of rights and duties of its own, and endowed with the potential of perpetual succession.
Advantages of Private Limited Company
- The liability of the company’s members will be limited to the extent they have agreed to contribute towards the capital of the company.
- The continuity of the company and its functioning is not affected by the death, disability or retirement of any its members.
- Corporate tax less compared to the Partnership firm tax rate.
- Increased investment opportunity in the company’s funds is further ensured by permitting a large number of persons to subscribe to the company’s shares.
- Better opportunity for strengthening capital resources, growth, and development of the enterprise.
- Minimal registration costs to forming a sole proprietorship.
- Few business compliance requirements.
Disadvantages of Private Limited Company
- Not suitable for small Business activity with limited geographic market.
- Compliance cost and Penalties if not regular in filing the compliance.
- Difficulty in Closing of the company.
Documents Required
It is very easy to register this type of business as very few documents are needed. The required documents include:
- PAN card (Copy) of all the Directors
- Adhaar card (Copy) of all the Directors
- Passport size photo of all the Directors
- Voter id/ Driving Licence/ Passport
- Bank statement of all Directors
- Proof of Address(Power bill, Municipal tax bill, Sale deed copy)
- Rental Agreement or NOC
Registration Duration
Registration of Private Limited Company takes the shortest time and can be completed within a min. of 7-10 working days. Despite registration taking the shortest time possible, this solely depends on government procedures and approvals during the time of your registration.
Registration Fee
The Government’s registration fee starts at Rs.1900 while professional fees start at Rs.8500 and the variance would depend based on the type of business, number of employees and location of the business and even the requirements to be met while registering your particular business.