Private Limited Company Registration

It is a business that exists legally as its own person, completely separate from its founders. Your personal assets — your house, your savings, your car — are protected from the company's liabilities. The company has its own PAN, its own bank accounts, its own obligations. It is also the only structure in India through which you can raise equity investment from angels and VCs, and offer shares to your employees as ESOPs.

You can do a preliminary check on MCA21 under 'Company / LLP Master Data' and on IP India (ipindia.gov.in) for trademark conflicts. However: a name appearing available on MCA can still be rejected for deceptive similarity to existing names, prohibited words, or trademark conflicts. PNPC conducts a thorough clearance check covering all three before any submission. We submit 2 options simultaneously to maximise approval speed.

Yes. The entire MCA process is electronic. No visits to any government office. No visit to our office (though you are always welcome). The only step requiring any physical action is the DSC video verification — a 10-minute video call from your phone with the certifying authority. For NRI directors outside India, document apostille is coordinated remotely through the Indian Embassy in your country.

The Memorandum of Association defines what your company is legally permitted to do. The Articles of Association define how it will be governed — share transfer rules, voting rights, director appointment and removal, meeting procedures. A generic template MoA with broad catch-all objects sounds safe but creates problems: some licences require specific object language; investors often require particular objects clauses; and RoC may query overly wide objects. A template AoA without pre-emption rights, drag-along and tag-along provisions will need amendment before any investor signs a term sheet — at the cost of a shareholder resolution, legal fees, and RoC filing time.

INC-20A is the Commencement of Business Declaration — certifying that share capital has been paid up and a bank account opened. It must be filed within 180 days of incorporation. If missed: the company cannot legally commence any business activity, cannot borrow money, the company is liable for a penalty of ₹50,000, every officer in default is liable for ₹1,000 per day of continuing default subject to a maximum of ₹1,00,000 under Section 10A of the Companies Act 2013, and the company is vulnerable to being struck off the MCA register. This is one of the most widely missed post-incorporation obligations because portals stop at the COI.

Minimum 2 directors. At least one must be an Indian resident — physically present in India for not less than 182 days in the previous calendar year under Section 149(3) of the Companies Act 2013. For NRI or foreign promoters who are not resident in India, this means identifying a trusted individual to serve as the resident director. This person does not need to be an owner or hold any economic stake.

Yes. NRIs can complete the entire process remotely. Requirements: passport apostilled by the Indian Embassy in the country of residence, foreign address proof notarised locally, and a DSC obtained through online video verification. Share subscription by an NRI constitutes Foreign Direct Investment (FDI) under FEMA — Form FC-GPR must be filed with RBI within 30 days of share allotment. PNPC handles the entire process including the India-side FEMA compliance, from our Chennai/Bangalore/Hyderabad offices. For UAE-based NRIs, our Dubai office works alongside the India team.

No minimum paid-up capital is required since 2015. You can incorporate with ₹2 (₹1 per subscriber). In practice, the authorised capital stated in your MoA determines the incorporation stamp duty — setting it too high wastes money upfront; too low requires a stamp-duty-bearing amendment before your first share issuance to investors. The right amount depends on your projected share issuances in the next 18–24 months.

Annual mandatory requirements: 4 Board meetings, AGM within 6 months of FY end, statutory audit, AOC-4 filing by 29 October, MGT-7 by 29 November, ITR-6 by 31 October, quarterly TDS returns, monthly/quarterly GST returns, DIR-3 KYC by 30 September. Estimated annual compliance cost for a startup with revenue under ₹1 crore: ₹70,000–₹1,80,000 depending on transaction complexity. PNPC offers fixed-fee annual retainer packages that cover every filing at a single agreed fee.

One clear test: if you will raise external equity investment within 3 years, or want to offer ESOPs to employees — choose Private Limited Company. LLPs cannot receive equity investment from VCs or PE funds, cannot issue ESOPs, and cannot list on stock exchanges. LLPs do have lower compliance costs and no mandatory audit below ₹40 lakh turnover — better for professional service firms with working partners and no funding plans. Every other consideration has nuances specific to your situation.

This is entirely governed by two documents: the Articles of Association and the Shareholders' Agreement (SHA). An AoA that does not address share transfer on founder exit, deadlock resolution, forced transfer, or non-compete provisions leaves you with no legal mechanism other than court proceedings. A SHA that contradicts the AoA creates further complications. PNPC drafts both documents together — they are internally consistent and address the realistic scenarios that arise between co-founders.

PNPC has operating offices in Chennai, Bangalore, Hyderabad, and Dubai. For India-UAE business flows — whether an Indian company selling to UAE clients, an NRI in Dubai setting up an Indian entity, or a business needing both an Indian Pvt Ltd and a UAE Free Zone or Mainland company — we handle both under one engagement. India-side: incorporation, FEMA/FDI compliance, annual MCA and tax filings. UAE-side: trade licence, UAE Corporate Tax registration, VAT, WPS payroll. India-UAE DTAA advisory and ODI compliance are managed as a unified matter — not split between two firms.

PNPC charges a fixed, agreed fee for the incorporation package — covering everything from pre-incorporation consultation through post-incorporation setup. The exact fee is discussed and confirmed in writing before any work begins. We are not the cheapest option. Professional advice, custom document drafting, and decades of CA practice cost more than a form-filing portal. What you save in the long term — through correct structure, investment-ready documents, zero compliance penalties, and available CA advice when things happen — consistently exceeds the difference in upfront fee.

An online portal files your SPICe+ form and closes the ticket when the COI arrives. It does not advise you on whether a Pvt Ltd is the right structure. It does not draft your MoA to protect your interests at an investor round. It does not track INC-20A. It does not call you when the AGM deadline approaches. It is not available when your co-founder wants to exit. It has no opinion on your first investor's term sheet. PNPC is a practising CA firm. We are present before incorporation, through incorporation, and for the life of your company. Our engagement does not end when the COI is emailed.

Pre-incorporation advisory consultation. MCA + Trademark name clearance check. Custom Memorandum of Association drafting. Custom Articles of Association drafting with appropriate governance clauses. Complete SPICe+ filing including DSC coordination for all directors. Query handling with MCA until COI is issued. PAN and TAN activation tracking. Bank account opening document preparation. Form ADT-1 (auditor appointment) filed within 30 days. INC-20A tracking and filing within 180 days. First Board Meeting agenda and minutes template. Annual compliance calendar — every due date for the first financial year. Direct CA contact details for post-incorporation questions.

A DSC is an electronic credential issued by a licensed Certifying Authority (CA) under the IT Act 2000 that proves the identity of the signer in electronic transactions. Class-3 DSCs are required for all MCA filings, including SPICe+. Without a valid DSC for every director, no MCA filing can be submitted. DSCs are obtained through a video-based verification process — a short online identity check. PNPC coordinates the DSC procurement for all directors as part of the incorporation engagement.

A DIN is a unique, lifetime identifier for each person who acts as a company director, allotted by the MCA. Every director must have a DIN. The SPICe+ form simultaneously allots DINs to up to 3 proposed directors who do not already have one. Directors who already hold a DIN from a previous or existing company use their existing DIN. Once allotted, DIN is perpetual — it stays with the person regardless of how many companies they serve as director.

MCA has waived the RoC incorporation filing fee for companies incorporated with authorised capital up to ₹15 lakh. For higher authorised capital, a sliding fee scale applies. State stamp duty on the MoA and AoA is levied separately and varies by state of incorporation — typically in the range of several hundred to a few thousand rupees for small capital structures, but significantly higher in states like Maharashtra or Karnataka at larger capital amounts. GST and EPFO registration through AGILE-PRO-S is also covered under the SPICe+ process at no additional government fee. Professional fees (CA firm) are separate.

SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) is the integrated MCA form that covers multiple registrations in a single filing. Part A covers name reservation. Part B covers the company incorporation itself, and simultaneously applies for: DIN for up to 3 directors, PAN, TAN, GST registration (via AGILE-PRO-S), EPFO registration, ESIC registration, professional tax registration (in states where integrated), and bank account opening (AGILE-PRO-S). This one-form approach is a significant improvement over the pre-2020 process and reduces the post-COI registration queue considerably.

Yes. There is no restriction in the Companies Act on using a residential address as the registered office. You need a recent utility bill (within 2 months) in the property owner's name and a No-Objection Certificate from the property owner allowing the company to use the address. The registered office can be changed later by filing Form INC-22 with MCA — no business disruption. Many startups use a founder's home address at incorporation and switch to commercial premises once operations are stable.

No. GST registration is optional at the incorporation stage. The AGILE-PRO-S section of SPICe+ allows an optional GST application simultaneously with incorporation, but it is not compulsory. GST becomes mandatory when your annual aggregate turnover exceeds ₹40 lakh for goods (₹20 lakh for services, ₹10 lakh for businesses in special category states) or immediately if you make inter-state taxable supplies regardless of turnover. You can apply for GST registration separately after incorporation once you know your business model clearly.

Authorised capital (also called nominal capital) is the maximum value of shares your company is legally permitted to issue to shareholders, as stated in the Memorandum of Association. Paid-up capital is the actual value of shares issued to and paid for by shareholders. You can issue shares only up to the authorised capital limit. To issue more, you must first increase authorised capital by passing a special resolution and filing Form SH-7 with MCA — which attracts additional state stamp duty. Paid-up capital can be any amount up to (and must not exceed) the authorised capital.

Angel tax was the informal name for the income-tax provision under Section 56(2)(viib) of the Income-tax Act, which treated the excess of consideration received over the Fair Market Value (FMV) of shares — when issued to a resident investor — as income in the hands of the company, taxable at the applicable corporate rate. The Finance (No. 2) Act, 2024 abolished Section 56(2)(viib) with effect from 1 April 2025 (Assessment Year 2025-26 onwards) — it no longer applies to shares issued on or after that date, for resident or non-resident investors alike. For companies that issued shares before that date, the provision (and any pending assessments or valuation defence built on Rule 11UA FMV) can still be relevant. Founders raising funds now do not need to plan around angel tax, though a defensible valuation remains good practice for governance, pricing discipline, and other purposes such as FEMA/FDI pricing guidelines.

FC-GPR (Foreign Currency — Gross Provisional Return) is an RBI reporting form that must be filed whenever a company issues equity shares, CCPS, or other FDI-eligible instruments to a person resident outside India. It must be filed on the FIRMS (Foreign Investment Reporting and Management System) portal of the RBI within 30 days of the share allotment date. Failure to file FC-GPR within 30 days requires an application for compounding under FEMA, which involves penalties and legal costs.

Yes. Foreign nationals can be directors of an Indian Private Limited Company. They require an apostilled and notarised passport copy as identity proof, a foreign address proof similarly apostilled/notarised, and a DSC obtained via online video verification. A foreign director does not need an Indian PAN to be appointed as director, but will need one if they earn any income in India (including director sitting fees or salary). The 182-day Indian residency requirement for the mandatory 'resident director' must still be satisfied by at least one other director.

Vesting is a contractual arrangement under which a founder's equity is earned over time or milestone achievement — typically set up so that if a founder leaves in the first year, they forfeit some or all of their shares. In India, founder vesting is governed by a contractual document (Founders' Agreement or SHA) and the Articles of Association share transfer restrictions — not by a separate statute. A typical arrangement is a 4-year vesting schedule with a 1-year cliff — meaning no shares vest if the founder leaves within the first year, then monthly vesting thereafter.

An Employee Stock Option Plan (ESOP) is a scheme under Section 62(1)(b) of the Companies Act 2013 that grants company employees the right to purchase shares at a pre-agreed exercise price after a vesting period. Options not yet exercised are not shares — employees become shareholders only on exercise. The scheme must be approved by a special resolution of shareholders and comply with the Companies (Share Capital and Debentures) Rules 2014. Unlisted companies are not bound by SEBI ESOP regulations but typically follow similar discipline for investor and employee confidence.

A company that fails to file annual returns and financial statements for two or more consecutive financial years is classified as a 'dormant company' or may be identified for MCA strike-off action under Section 248 of the Companies Act. Once struck off, the company name is removed from the MCA register and it ceases to exist as a legal entity. Revival is possible within a limited period by applying to the NCLT under Section 252 — but the process is costly, time-consuming, and involves penalties and professional fees that dwarf the cost of regular compliance.

Yes. Conversion from Private Limited to Public Limited Company is carried out under Section 14 of the Companies Act 2013 by passing a special resolution of shareholders and filing Form INC-27 with MCA. The company must then comply with the more stringent requirements for Public Limited Companies — minimum 7 shareholders, minimum 3 directors, no restrictions on share transfers, and compliance with SEBI listing regulations when applying for a stock exchange listing. This conversion typically happens in preparation for an IPO or when the company exceeds 200 shareholders.

The registered office is the official address of the company as registered with MCA — all legal notices, government correspondence, and RoC communications are sent here. The principal place of business is where the company's primary commercial activity takes place. These can be different addresses. You must maintain a signboard at the registered office and keep statutory registers and books of account available for inspection there (or at the registered office as notified). The principal place of business is relevant for GST registration — you must register in each state where you have a fixed establishment.

Yes. A Private Limited Company must hold at least 4 Board meetings per financial year, with not more than 120 days between two consecutive meetings. The first Board meeting must be held within 30 days of incorporation. Each meeting requires proper notice (7 days written notice under Section 173, unless waived by all directors), a quorum, proper minutes recorded in the Register of Minutes, and a directors' attendance record. A director who does not attend 3 consecutive Board meetings without prior leave is deemed to have vacated office.

Section 164(2) of the Companies Act 2013 disqualifies a director if any company in which they are a director has not filed annual returns or financial statements for 3 consecutive financial years. Disqualification is automatic — no court order is required — and the disqualified director cannot be appointed or continue as director in any company for 5 years from the date the disqualification takes effect. MCA publishes a disqualified directors list annually. A disqualified director who continues to act as director commits an offence.

The Articles of Association is a public statutory document registered with MCA — it governs the company and is enforceable by the company against all shareholders. The Shareholders' Agreement (SHA) is a private contract between specific shareholders — typically founders, and later investors — that governs rights and obligations between those parties. The SHA can include rights that are not in the AoA: information rights, board observer rights, veto rights, lock-up periods, and more detailed founder obligations. When they conflict, the AoA typically prevails as the registered statutory document — hence the importance of ensuring they are aligned.

A Pvt Ltd pays corporate income tax on its profits. Companies opting for the concessional rate under Section 115BAA pay at 22% base rate, resulting in an effective rate of approximately 25.17% including surcharge and cess. Companies not opting for 115BAA are taxed at 30% (plus surcharge and cess). In addition: GST on sales and services, TDS withheld on specified payments made (rent, professional fees, contractor fees, salary), advance tax paid in four instalments during the year, and MAT (Minimum Alternate Tax) under Section 115JB applies if the company opts out of 115BAA. Dividend paid to shareholders is taxed in their hands at their applicable income-tax slab rate.

Every Private Limited Company must file annually: AOC-4 (financial statements) within 30 days of AGM (generally by 29 October for April–March FY companies), MGT-7 (annual return) within 60 days of AGM (generally by 29 November). The AGM itself must be held within 6 months of the financial year end — typically by 30 September. Additionally: ITR-6 (income tax return) by 31 October (typically), DIR-3 KYC by 30 September for all active directors, quarterly TDS returns, and monthly or quarterly GST returns. Event-based filings (director changes, charge creation, capital increase) are additional and have their own deadlines.

DIR-3 KYC is an annual web-based verification form through which every active DIN holder must confirm their personal details, mobile number, and email address with MCA — to be filed by 30 September each year. If not filed by the due date, the DIN is marked 'Deactivated' by MCA. A director with a deactivated DIN cannot sign any MCA form or continue to act as director until the DIN is reactivated by filing DIR-3 KYC with a late fee. Companies with a director whose DIN is deactivated cannot file any event-based or annual forms until it is resolved.

Yes. A Private Limited Company must complete a statutory audit and file AOC-4, MGT-7, and ITR-6 every year — regardless of whether it has any revenue, transactions, or even a bank account balance. A nil financial statement is still a financial statement that must be audited and filed. The only exemption that exists is if the company has never commenced operations and applies for dormant company status under Section 455 — but even dormant companies must file an annual return.

The statutory auditor is an independent Chartered Accountant appointed by shareholders under Section 139 of the Companies Act to examine and report on the company's financial statements each year. The auditor's report is attached to the balance sheet filed with MCA. Under Section 141, a person is disqualified from being auditor if they (or their firm) have a business relationship with the company, are an employee or officer of the company, or are indebted to the company beyond prescribed limits. A relative of a director being the auditor is not automatically disqualifying under the Act alone, but creates independence concerns that sophisticated investors will flag in due diligence.

Yes. A person resident in Singapore — whether Indian or foreign national — can be both a shareholder and director of an Indian Private Limited Company. As a shareholder, their investment constitutes FDI and must comply with FEMA's FDI policy — FC-GPR filed within 30 days of allotment. India and Singapore have an existing Double Taxation Avoidance Agreement (DTAA) and a Comprehensive Economic Cooperation Agreement (CECA) that may be relevant for intercompany transactions and withholding tax. As a director, they follow the foreign director documentation process — passport apostilled from Singapore, foreign address proof, DSC via online verification.

To add a new director after incorporation: the Board passes a resolution appointing the proposed director (who must have a valid DIN or apply for one). Form DIR-12 is filed with MCA within 30 days of appointment, along with the director's DIR-2 consent to act as director. If the new director is also receiving shares (as a co-founder or otherwise), a share allotment requires a Board resolution (or shareholder special resolution for certain categories), Form PAS-3 filed within 15 days of allotment, and share certificates issued within 60 days. If new shares are issued at a price, any premium must be credited to the Securities Premium Account.

DPIIT (Department for Promotion of Industry and Internal Trade) Startup Recognition is a government certificate under the Startup India initiative that provides a recognised startup with several benefits: eligibility for tax exemption under Section 80IAC (3-year income tax holiday on profits for any 3 out of first 10 years, subject to Inter-Ministerial Board approval), simplified compliance, self-certification under select labour and environment laws, fast-track patent examination with an 80% rebate on patent filing fees, and access to government procurement preferences. Eligibility: company less than 10 years old, incorporated as a Private Limited Company, LLP or registered partnership, annual turnover not exceeding ₹100 crore in any FY, and working towards innovation, development, or improvement of products, services, or processes. Note: Section 56(2)(viib) 'angel tax' — for which DPIIT-recognised startups historically needed a specific exemption route — was itself abolished for all investors with effect from 1 April 2025, so that particular DPIIT benefit is no longer relevant going forward.