A Detail Study of a Private Limited Registration in Mumbai

A Private limited company is among the best methods to begin a business in India. This sort of organisation provides minimal liability for its stockholders while restricting ownership. An LLP is run by partners who own and control the company. Directors and stockholders may be different in private limited registration.

What is a Private Limited Company?

A private limited company or a Pvt. Ltd is a privately held firm for small enterprises. This company structure limits owner responsibility to their shareholdings, limits the number of shareholders to 200, and prohibits shareholders from openly exchanging their shares.

Advantages of Private Company Registration

1. Limited danger to personal assets
 

 A private limited company's stockholders have limited responsibility. This implies that as a shareholder, you will be obligated to pay for the company's responsibility solely to the degree of your contribution. Because the shareholders have no personal obligation, they are not required to pay for the company's liabilities out of their own assets.

2. Statutory Entity
 

A Private Limited Company is a distinct legal entity from you. This implies that the Company is in charge of managing its assets and obligations, as well as its debtors and creditors. You will not be kept responsible for the company's damages. As a result, the creditors cannot sue you to recover the money.

3. Raising Capital
 

Although creating a PLC entails regulatory requirements, it is favoured by entrepreneurs because it allows them to raise cash through stock, expand, and restrict liability.

4. Trustworthiness
 

Under the Companies Act, companies are registered with the Registrar of Companies. Anyone may look up the company's information on the Ministry of Corporate Affairs website. In addition, information about all of the directors is submitted at the company's establishment. As a result, a Private limited company structure is more trustworthy.

5. Perpetual Succession
 

A business has 'perpetual succession,' which means it will continue to exist until it is lawfully dissolved. A business, as a separate legal entity, is undisturbed by the termination or death of any member & persists to exist regardless of membership changes.

Different Types of Company Registration

• Private Limited Company Registration
• Public Limited Company Registration
• One-Person Company Registration
• Section 8 Company Registration
• Nidhi Company Registration
• Producer Company Registration

Process of a Private Limited Registration in Mumbai
 

The step-by-step process of incorporation and registration of a private limited in Mumbai is discussed below:

Step 1- Acquire Digital Signature Certificate
 

To submit the forms for private company incorporation, digital signatures are necessary. The registration is entirely online, and all forms need a digital signature. DSC is required in the Memorandum of Association and Articles of Association for all subscribers & witnesses.

The digital signature certifications must be obtained from government-approved certifying agencies. A list of such accredited authorities is available here. Alternatively, you may obtain the DSC online in about two days by clicking here. The price of receiving DSC varies according to the certifying authority. You must get DSC in the class 3 category.

Step 2- Obtain Director Identification Number
 

DIN is a director identification number. Anyone who wishes to be a director in a private limited company must get it. One DIN is sufficient to serve as a director in any number of corporations.

There are two ways to get DIN:
 

Option 1: Submit Form DIR-3 If you wish to be a director of an established corporation, you must submit Form DIR-3. This form requested basic information about the prospective director as well as identity evidence such as PAN, Aadhaar Card, and address proof. DIN can be used in the SPICe+ form for a maximum of three directors beginning on February 23, 2020, for new companies.

Option 2: When SPICe+ is filed, DINs are granted to prospective directors who do not possess one. A maximum number of 3 directors may apply for DIN through the SPICe+ (INC 32) filing process. If the applicant wishes to create a company with more than three directors & more than three of the directors do not have DIN, the applicant must register a company with three directors and nominate new directors later after incorporation.

Step 3- Name Approval
 

You get the name approval in the following ways:
 

Option 1: Reserving the name using SPICe+ Form Part-A: In an effort to simplify procedures for both new and existing businesses, the Ministry of Corporate Affairs launched the SPICe+ web service for company creation on February 23, 2020. Part-A of the SPICe+ form provides for a "name reserve" with 2 proposed names & 1 re-submission (RSUB) while retaining Distinct Names for the Companies.

If the name is rejected owing to similarities with a registered business, an LLP, or a trademark, or due to non-compliance with the Companies Incorporation Rules 2014, the applicant must re-file another SPICe+ form with the specified price. However, once approved, the name will be retained for 20 days, during which the firm must proceed with incorporation by completing Part B of the SPICe+ form.

Option 2: Name approval by submitting Parts A and B of the SPICe+ Form together: You can submit an application for the desired name along with your incorporation application. Part B of the SPICe+ allows for incorporation applications. SPICe+, like the previous SPICe form, allows for a combined application for private limited registration & name approval. That is, Parts A and B of the SPICe+ form can be filed simultaneously. This type, however, can only have one name.

Step 4- Form SPICe+(INC 32)
 

From February 23, 2020, the MCA will accept Form SPICe+ for the incorporation of new private companies. The incorporation & registration of a private limited company under Part-B of the SPICe+ form is also web-based, which simplifies company formation.

Following name approval, the candidate can proceed with the incorporation by clicking on the link of the accepted name (found on the user's dashboard). Part-B of the SPICe+ form supports web-based incorporation and performs the following functions with the convenience of a single application:

• DIN allocation application (Director Identification Number)
• Company name reservation
• Formation of a new corporation
• PAN and TAN Application (mandatory)
• EPFO registration application (mandatory)
• ESIC registration application (mandatory)
• Professional tax registration application (only for Maharashtra)
• Application for the establishment of a corporate bank account (mandatory)
• GSTN (Goods and Services Tax registration number) allocation if applied for (optional)

The new SPICe+ form allows for web-based input and real-time data validation, making private limited registration in Mumbai a simple and rapid procedure. The information entered in SPICe+ Parts A and B will be automatically completed in the associated forms AGILE-PRO, e-AoA, e-MoA, URC1, and INC-9 (as applicable).

Step 5- e-MOA (INC-33) & e-AOA (INC-34)
 

e-MoA is for electronic Memorandum of Association, whereas eAoA stands for electronic Articles of Association. These forms were created to make the process of forming a corporation in India easier. The memorandum symbolises the company's charter, whereas the articles of association include the company's internal rules and regulations.

Previously, the memorandum of association & articles of association had to be physically submitted. However, these forms are now filed online via the MCA site as a connected form with SPICe+ (INC-32). Members of the Articles of Association and Memorandum of Association must digitally sign both of these papers.

Step 6: Apply for PAN and TAN 
 

You may also apply for your company's PAN and TAN using one single SPICe+ form. Following the compliance of the SPICe+ form, the system will produce these forms automatically. After the SPICe+ Form is approved, the PLC Certificate of Incorporation is issued together with the PAN assigned by the Income Tax Department. The MCA will send an email with the Certificate of Incorporation, PAN, and TAN. The PAN card will be issued by the Income Tax Department.

If all of the data in the form are correctly filled out, together with the relevant papers, the MCA will authorise the registration and provide a Corporate Identity Number. This CIN can also be tracked online using the MCA site.

Documents

For private limited company registration, the documents must be filed with SPICe (INC-32):

A. Where the director & subscriber are both Indian citizens

• All subscribers of the Company must sign an Affidavit on Stamp Paper stating their readiness to become shareholders of the Company.
• Proof of business address - Rental contract or ownership deed, such as a sale deed
• Utility bill copies that are no more than two months old, such as an electricity bill, a water bill, or a gas bill
• Utility bill copies that are no more than two months old
• Copy of permission if the proposed company name includes any word(s) or expression(s) that need central government approval.
• A NOC from the property owner is required if the registered office is on rented/leased property.
• If a subscriber/Director does not have a DIN, evidence of identification and address verification of the subscribers must be included.

B.Where the subscriber/director is a foreign national with a valid passport Address proof: 
 

It might be a driver's licence, a residence card, a bank statement, or any other kind of government-issued identification with an address.

Conclusion
 

In India, a Private Limited is one of the most frequent kinds of legal entity. The Companies Act 2013 governs private limited companies, which must have at least two directors and two shareholders, one of whom must be an Indian resident and citizen. Private limited registration in Mumbai may be conducted online using Online Legal India.