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In India, the most common type
of "legal structure" is a private limited
company. A Private Limited Company Registration in
India is governed by the Ministry of
Corporate Affairs and is incorporated under the
Companies Act of 2013. It is legally distinct
from its owners. It is widely used because it
provides numerous benefits to its directors, such
as limited liability, which means that if the
company defaults, bank/creditors can only sell the
company's assets and not the directors' personal
assets. Starting a business in India is a pipe
dream unless you have a proper business entity to
back it up.
Everyone, from veterans to novices, from budding start-ups to established entrepreneurs, and from north to south India, regard it as the best business entity. You can use our services to register your Private Limited Company. We have served clients from major cities throughout India for Private Limited Company Registration.
LegalRaasta team of knowledgeable and efficient experts is always available to help and advise you on the process of forming a Private Limited Company. LegalRaasta is a leading business startup consultant in India, offering a wide range of company registration services.
Submit an application for the reservation of the Company's name via Spice PART. A form that can be accessed through the MCA portal.
Selecting an appropriate name for the Private Limited Company. Private Limited Company name suggestions can also be obtained from LegalRaasta Private Limited Company Registration experts.
After receiving the application, the MCA will either approve or reject it within 3-4 days.
If the name is approved, the MCA will send us a name permission letter, and we must register the company within 20 days.
To extend the grace period before the 20-day grace period expires, an additional fee must be paid.
To get the DSC of the company's directors which will aid in the authentication of documents uploaded online.
Using SPICE PART B, electronically draught the company's MOA and AOA.
Submitting an online application to form a Private Limited Company.
The application will be evaluated by the Ministry of Corporate Affairs.
A Certificate of Incorporation, PAN, and TAN will be issued by the department upon the formation of a company.
There is no minimum capital requirement to form a Private Limited Company, and it can be registered with as little as Rs. 10,000 in total Authorized Share capital.
A Private Limited Company is a separate legal identity in the eyes of the law, which means that the assets and liabilities of the business are distinct from the assets and liabilities of the Directors. A juristic person is someone who isn't a natural or human being. Members of a company are not liable to the company's creditors for such debts. A Private Limited Company separates management and ownership, so managers are accountable for the company's success as well as its failure.
Because they can claim corporation tax relief on their profits, private limited companies are tax efficient. This can result in significant savings for businesses and increased profits, as well as capital allowances and R&D tax credits. Dividends paid by private limited companies to their shareholders are taxed at a lower rate.
A company, as a separate legal person, is unaffected by the death or other departure of any member and continues to exist regardless of membership changes.
The status of being legally responsible only for a limited amount of a company's debts. As a result, where a company is limited by shares, the members' liability on a winding-up is limited to the amount unpaid on their shares. For example, if a Private Limited Company takes a loan and is unable to repay it, the members are only obligated to pay the amount they own towards their own shareholding, i.e. the unpaid share value. This means that if you have no balance payable on the number of shares you own, you are not liable to the company for any debt or credit amount that remains unpaid.
In India, the only type of business that can raise funds from Venture Capitalists or Angel Investors is a Private Limited Company.
A shareholder's shares in a company limited by shares are transferable to any other person. When compared to the transfer of an interest in a business run as a sole proprietorship or partnership, the transfer is simple. Transferring shares is as simple as filling out and signing a share transfer form and handing over the buyer's shares along with the share certificate.
Due to the flexibility to set up an unlimited number of bank accounts, income and expense items, and other features, many online accounting software suppliers have integrated into their systems as private limited companies have risen in popularity. These include submitting annual returns and reports to Companies House, holding shareholder meetings, and maintaining accurate company records.
As a legal person, a corporation can acquire, own, enjoy, and alienate property in its own name. As long as the company is in business, no shareholder can make a claim on its assets.
Suing means to initiate legal proceedings against someone or to file a lawsuit in a court of law. Just as one person can sue in his or her own name against another in that person's name, a company, as an independent legal entity, can sue and be sued in its own name.
A company can enter into a valid and binding contract with any of its members under the company form of organization. It is also possible for a person to be in charge of a company while also working for it. An individual can thus hold multiple positions within the organization at once, including shareholder, director, employee, and any other position.
A company has more options for borrowing funds. It can issue both secured and unsecured debentures and accept public deposits, among other things. Even banks and financial institutions prefer to lend large sums of money to corporations rather than partnership firms or proprietary concerns.
It is permitted in a Private Limited Company, which means that any foreign entity or foreign person can invest directly in a Private Limited Company.
The company's specifics are available on a public database, which increases the company's credibility by making it simple to authenticate the details.
Factors To Be Considered
Private Limited Company
One Person Company
Limited Liability Partnership
|Applicable Law||Companies Act, 2013||Companies Act, 2013||Companies Act, 2013||Limited Liability Partnership Act,2008||Companies Act, 2013|
|Ideal For||It is ideal for Startup and growing Companies.||It is ideal for Single promoters.||It is ideal for Small Traders and Manufacturers.||It is ideal for Professional.||It is ideal for Small business & Home Business.|
|Minimum Number of Members||A minimum of atleast two shareholders and two directors are required to start a Private Limited Company.||A minimum of one persons are required to start a One Person Company.||Proprietorship can have only one person as member.||LLP can have minimum of two persons are required to start a LLP.||A minimum of two people are required to start a Partnership.|
|Initial Investment||No minimum requirement||No minimum requirement, but if capital exceeds 50 lakh , OPC gets converted into Private Limited||No minimum requirement||No minimum requirement||No minimum requirement|
|Tax Advantages||Profits from Private Limited Companies are taxed at a rate of 30% plus a surcharge and receive fewer tax breaks.||Profits from a one-person business are taxed at a rate of 30%, plus any relevant surcharges and cess, and with fewer tax breaks.||Taxed as an individual, with little tax benefits, and based on the proprietor's entire income.||LLP profits are taxed at a rate of 30%, plus a surcharge, and with other tax advantages.||Profits from partnerships are taxed at a rate of 30% plus a surcharge, with few tax advantages.|
|Annual Filings||Each year, Private Limited Companies are required to submit Income Tax Returns, Annual Returns, and Annual Accounts to the Registrar of Companies.||Each year, it must submit Income Tax Returns, Annual Accounts, and Annual Returns to the Registrar of Companies.||The Registrar of Companies is not required to receive an annual report. Based on the profits of the proprietorship, an income tax return must be filed.||Each year, LLP must submit an Income Tax Return, an Annual Statement of Accounts & Solvency, and an Annual Return to the Registrar.||The Registrar of Companies is not required to receive an annual report. The Partnership must file an income tax return.|
|Member(s) Liability||The responsibility of shareholders is restricted to the amount of their share capital.||The responsibility of a director or nominee is restricted to the amount of their share capital.||The proprietor is liable for all obligations of the proprietorship and has unrestricted liability.||Partners only have limited liability and are held accountable for their portion of the LLP's contributions.||Partners are liable for all Partnership liabilities and have limitless liability.|
|Transferability||Share transfers are one way to transfer ownership.||It's possible to transfer ownership.||Cannot be transferred.||It's possible to transfer ownership.||Cannot be transferred.|
|Business structure||Tax rate||Effective tax rate|
|Domestic company:||(Base rate)||(Base rate+ surcharge + CESS)|
|Not availing any exemptions or incentives||22%||25.17%|
|Manufacturing companies incorporated after 1st October 2019 and not availing any incentives or exemptions||15%||17.16%|
|Availing any incentives or exemptions||25%||25%+ surcharge + CESS (4%)|
|In any other case||30%||30%+ surcharge + CESS (4%)|
LegalRaasta was founded on the principle that sophisticated legal and taxation services should be simple, modern, and inexpensive. We can serve our clients more efficiently thanks to cutting-edge practise technology.
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