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Private Limited Company Registration in India: A Detailed Guide - Overview
In the case of a private company, at least two members are needed which is not the same in the case of OPC. The One Person Company is an advancement of sole proprietorship form of business. There is no more than a single director or more than a single member. Being a single-handled company, an OPC is easy to manage. There’s is only one person who acts as a member and a minimum of one director who is having full control over the company. An OPC is the most modern form of business in India proposed by the Companies Act, 2013. The OPC is fit for small businesses where the turnover is not likely to cross Rs. 2 Crores. IN OPC Registration it’s important to note that the nominee or the director should be Indian Resident. More often than not, people with sole proprietorships choose company incorporation as a one-person company, as it easily enables them to transition into a corporate framework.
- It can be registered with a single person as the director and shareholder
- Apart from that one person, a nominee is required
- No minimum paid-up share capital stipulated
- It is a separate legal entity just like a private limited company
- The shareholder enjoys limited liability
Types of OPC
OPC Formation can be done as an:
- OPC limited with Share Capital
- OPC unlimited company
- OPC Limited by Guarantee without Share Capital
- Unlimited OPC with Share Capital
- Unlimited OPC without Share Capital
Benefits to register Private Limited Company
After the online registration of a One Person Company in India, there are the following benefits that can be enjoyed:
Easy to manage: One-person companies are not liable to hold annual meetings. In fact, they are only required to have a board meeting twice a year as section 174. This makes them very easy to run.
Less Number of Compliances: For a One Person Company, the number of compliances is less.
Limited Liability: The directors’ personal property is forever safe in no matter the debts of the business. In OPC only investment in the company is lost, personal assets of the directors are saved.
Continuous Existence: An OPC has a separate legal identity, it would pass on to the nominee director, therefore, it has continued existence.
Easy to raise funds and loans: OPC is 1 of the easiest forms of corporate entities to operate. Very few ROC filing is to be registered with the Registrar of Companies. No need to handle Annual General Meeting and other regular compliances.
Flexible Agreement: Transferring the ownership of Individual Company is also simple. A person can quickly be inducted in as a designated partner and the ownership switches to them.
Checklist for Registering a Company in India
Eligibility
A minimum of two members who are aged 18 or more.
One of the Directors must be Indian Resident
A minimum share capital of Rs 100,000.
Documents Required
- PAN (mandatory) for Indian Nationals.
- Voter ID/Aadhar Card/Passport/Driving Licence
- Latest Bank Statement/Telephone or Mobile Bill
- Passport size Photograph of Directors and Shareholders
- Copy of the rental agreement or sale deed.
| Form of Business | PRIVATE LIMITED COMPANY | ONE PERSON COMPANY | LLP | PARTNERSHIP FIRM | PROPRIETORSHIP FIRM |
|---|---|---|---|---|---|
| Recommended For | Startups & Growing Companies | Sole Promoters | Professional Services Companies | Small Businesses Firms | Small Traders, Agents & Manufactures |
| Prevailing laws | Companies Act | Companies Act | LLP Act | Partnership Act | NA |
| Charter Documents | MOA & AOA | MOA & AOA | LLP Agreement | Partnership Deed | NA |
| Limit of Members | 2-200 | 1 | 2-Unlimited | 2-20 | NA |
| Separate legal identity | Yes | Yes | Yes | NO | NO |
| Limited Liability | Yes | Yes | Yes | NO | NO |
| Tax Advantage | High | High | Low | Low | Low |
| Annual Statutory Compliances | High | High | Low | Low | Low |
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FAQs
Simplified Performa for Incorporating Company Electronically, also known as SPICe, was introduced in the year 2016 for the purpose of incorporation of the companies. Under the Ease of Doing Business (EODB) initiative, the MCA released the new form SPICe+ to further ease the company incorporation process. The new SPICe+ form encompasses more features than the earlier SPICe form. Name approval is integrated as part of the SPICe+ form. The AGILE form has been converted to AGILE Pro to provide GSTIN / ESIC / EPFO / Bank account as well along with company incorporation. Apart from that, even after affixing DSC in the form, information can be modified in the SPICe+ form.
After the introduction of the SPICe+ form, the name approval has been integrated with SPICe+. Part-A of SPICe+ is for name approval. Therefore, from 15th February 2020, the RUN form can only be used for a change of name.
Company Limited by Shares: The liability of the shareholders is limited only to the amount that is unpaid on the shares held by them. Company Limited by Guarantee: A company having no share capital where the liability of the shareholders is limited up to the amount undertaken to be contributed by them in the event of liquidation of the company.
Yes. private limited companies are eligible for attracting foreign direct investments in compliance with the relevant laws and regulations.
DIN, also known as Director Identification Number, is an identification number of a person intending or has become a director in a company. DPIN, also known as Designated Partner Identification Number, is an identification number for a designated partner in LLP. It is similar to DIN in the case of companies. DIN and DPIN are issued by the Ministry of Corporate Affairs.
Yes. Even a foreign national can become a director in a private limited company.
As per the Companies Act, 2013, only an individual natural person can become a director in a company. Therefore, neither a company, firm, or association can become a director in any company. This is to ensure the fixation of duties and responsibilities that would be difficult in the case of companies and firms becoming directors.
The private limited company registration cost depends upon various factors like authorized capital, number of directors, etc. Initiate your Pvt. Ltd. Company Registration with eAuditor Office as your partner in corporate compliance! Reach out to us for any professional assistance.