Company registration is an important step before starting any business. Because it defines the boundaries and sets up the foundation of the business. The registration of business is also important. it helps to get the business recognized and spread it among the common man. There are many kinds of business such as OPC (One-Person Company), LLP (Limited Liability Partnership), Private Limited Company, etc. The type of business which is currently popular and hot in the current market is a private limited company.
A private limited company or LLC (limited liability company) is a type of business entity. There is limited liability of the owners. Under, these entity owners do not take participation in day to day affairs of the company. They choose representatives to take participation in the day-to-day affairs of the company. It is one of the most preferred business forms for venture capitalists and other medium-sized start-ups There are so many advantages of sole proprietorship and partnership. The process of registration is less tiring than a public limited company. It is also sometimes preferred over it.
The liability of the owners of a private limited company is the limited up-to-the number of shares purchased by them.
A private limited company enjoys more goodwill in the market as compared to sole proprietorship and partnership. This also helps in raising finance from the market for the company.
Transfer of business
The business can be easily transferred through the transfer of shares of the firm. There is signing, filing of shares transfer form and the share certificates are adequate to transfer the business.
Separate Legal Entity
The private limited company is a separate legal entity. The owners have limited liability and no owner is personally responsible for the actions of the company. Even, the death of one of the directors does not severely affect the operations of the company.
Even though the registration process has been simplified. But it still is a little complex and time-consuming. The compliance cost for these firms is also a little high.
Division of Ownership
There is a division of ownership in the sense that directors and owners are separate. Because directors are the representatives of shareholders or owners in the company. Hence, it is quite possible that there might be issues on certain decisions regarding the company.
The procedure for winding up of a company is cumbersome because it involves consuming legal formalities to be complied with. Hence, it is important to form a company only if the business has to be run for many perpetual years
Now, the registration of a private limited company is governed by the Companies Act, 2013. A minimum of 2 directors must be present at the time of registration of the company and a minimum of 2 and a maximum of 200 shareholders must be present at the time of registration of the company. As per the Companies Act, 2013 the earlier minimum requirement of paid-up capital amounting to Rs. 1 lakh has been removed. As per the current law, there is no minimum capital required at the time of incorporation of the private limited company.
The members registering their company should have the following documents at hand:
Identity proof of directors
Address proof of directors
Passport size photograph
Office address proofAfter the above-mentioned documents have been procured, we move on to the following steps:
DSC ( Digital Signature Certificate )
The first and foremost step is to get the DSC, this is required for filing of forms online, for registration purposes and returns of the company.
DIN ( Director Identification Number )
This number is mandatory to be issued for being a director of the company. It is a unique number and issued by the Ministry of Corporate Affairs. It generally takes 1-2 business days for DIN to be issued.
Reservation of the name
Another important step is to get the name of the company registered. A maximum of 6 names can be provided for consideration, and members should focus on a name because it should be simple and easy to remember.
CIN ( Corporate Identification number )
CIN is a unique identification number. The ROC (registrar of companies) assign this. it is the final step in the registration process of the company.
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