How you can start a Private Limited in India

India has become a good destination for starting a private limited company. By the term “Private Limited Company” (PLC), it is understood that there must be a minimum of two members or a maximum of 50 members to start its functioning. A PLC has some of the characteristics of a partnership firm, but it has restriction in the number of members, as in a Limited Liability Company (LLC). The advantages of starting a PLC and the documents needed to start such a company have been discussed in a previous mail. This article provides an in-depth detail of how to start such a company.

The reasons on why you should register your company

Starting a company in India calls for a lot of advantages. It is a legal entity in itself, possesses the advantages of an LLC, and offers greater stability for its owners. A PLC is somewhat like a mix of a public company and a partnership company. Here are the reasons why you should register your company:

  1. Protection

    When you are registered at a PLC, it offers protection not just for you, but for your family and assets as well. When your company is not properly registered, then you would find yourself in a sinking ship if somebody sues against you. The legal protection of a PLC would provide sufficient protection when an accident happens or when you suffer financial loss. If somebody bought a product from you, and that person had to suffer some sort of consequences as a result of it, due to no responsibility of yours, then registering your company in the proper way would protect you. This would also be helpful when you go bankrupt, endure a lawsuit and suffer through subsequent payments.

  2. Help you get more funds

    If you are a PLC, then your chances of getting a funding for your company is pretty high. Investors are ready to give money to a registered company, or you can contact a venture capitalist who would be pleased to provide the funds for an incorporated company.

  3. The name of the company lives on forever

    No matter who comes and goes, the legacy of your company would live for years to come. New board of directors may come, members may change and shares may be transported, but the legacy continues.

Importance of a Director in a company

It is important that the PLC has a director if you want the company to be eligible for registration. A director has to be over 18 years of age and may or may not be a resident of the country, with no limitations. That means, a foreigner can come here and start a company, provided he gets all the paperwork in the right order.

To register a company

The registration process of a company requires both online and offline work. Here are the four steps for you to remember it easily

  • Getting DSC and DIN
  • Name approval
  • Filing for incorporation
  • Submitting TAN and PAN
  • Get a DIN

One of the first moves by you should be to get a Director Identification Number or a DIN, as it is popularly known and a Digital Signature Certification, or DSC. You can visit the concerned website to download the form and get the process started. It would take one day for the DIN and four days for the DSC processing to complete.

  • Approval for the company name and waiting for the certificate of Incorporation

You have to fill at least 4 forms to get this task done. It is the Registrar of Company (RoC) that gives the approval for your company name. For company approval, you have to sign Form 1A and for the certificate of Incorporation, you have to sign the following forms – Form 1, Form 18 and Form 32.

  • Things to be done in order to get the certificate of Incorporation

You have to submit the completed Form 1 to receive the certificate of Incorporation. But the scanned copies of the following documents must also be sent, attached with your Form 1:You must attach signed and stamped copies of both Memorandum of Association (MoA) and Articles of Association (AoA).

A judicial stamp paper of Rs.100 must be attached along with Power of Attorney from subscribers

Form 32 and consent letters from all the Directors of the company

Must carry all the identification proof of all the subscribers

Clarification of Memorandum of Association (MoA) and Articles of Association (AoA). In the Memorandum of Association, you must mention how you intend to raise the capital for starting the company and for what purpose. You must mention both present and future goals. All the internal clauses and details of functioning of the company would be mentioned in the Articles of Association. Both these are then sent to the registrar’s office for verification purposes and stamped. The cost involved in the stamp duty varies from state to state.

  • Submitting TAN and PAN

Visiting would let you apply for TAN and PAN numbers. TAN is Tax Account Number while PAN is Permanent Account Number. Before getting the work done, you must also register for receiving a rubber stamp pertaining to VAT, Employee provident fund, Medical insurance etc.
The Ministry of Corporate Affairs (MCA) has come up with a new form known as INC-29 for incorporating a new company. It is an Integrated Incorporation Form that would let you get DIN, incorporation application and name approval in a single application.


About 70% of the work related to registering your company can be done online. This saves you a lot of time, money and effort.

Interesting links about the topic:
steps for starting a new private company in India
Initial steps for starting a business in India

Pictures: mjtmail/ Maryland GovPics

The author: Reema Oamkumar is engaged as a thought leader at which is a part of the YUHIRO Group. YUHIRO is a German-Indian enterprise which provides programmers to IT companies, agencies and IT departments.

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