Overview
A private limited company is a separate legal person registered under the Companies Act, 2013. It can own property, sign contracts and sue or be sued in its own name, while its shareholders risk only the money they put into shares.
Registration is done online with the Ministry of Corporate Affairs through the integrated SPICe+ form. One filing can cover the name, the director identification numbers, PAN, TAN, and in most cases registrations for EPFO, ESIC and GST as well, so the company is ready to operate on the day the certificate is issued.
The shares of a private company cannot be offered to the public, and the number of shareholders is capped at 200. That restriction is what keeps the compliance burden lower than a public company while still giving investors a familiar structure.
Is a private limited company the right fit?
It tends to suit businesses that want to grow beyond one or two owners, or that need to look credible to banks, large customers and investors.
Usually a good fit if
- You plan to bring in investors, issue ESOPs or add co-founders later.
- You want the owners' personal assets kept separate from business debts.
- Your customers or tenders prefer dealing with a registered company.
- You want the business to continue even if a founder leaves.
Think twice if
- You are a freelancer or very small trader with no plan to scale; a proprietorship or LLP may cost less to maintain.
- You want to avoid a statutory audit and annual ROC filings altogether; a company must do both every year, even with no sales.
Key benefits
Limited liability
Shareholders are liable only up to the unpaid value of their shares, not with their personal property.
Perpetual existence
The company carries on regardless of changes in directors or shareholders.
Easier to fund
Equity, convertible notes and ESOPs are all designed around company structures.
Separate identity
The company holds its own bank account, assets and contracts.
Transferable ownership
Shares can be transferred, subject to the articles, without closing the business.
Credibility
A CIN, a registered office and filed accounts are what banks and corporate buyers look for.
What we need from you
Keep these ready before we begin. Scans should be clear and in colour; the originals do not need to be sent unless the authorities ask for them.
For every director and subscriber (Indian residents)
- PAN card
- Aadhaar card
- One more identity proof: passport, voter ID or driving licence
- Address proof: a recent bank statement or utility bill, not older than two months
- Passport-size photograph
- Active mobile number and email address, unique to each person
- Digital Signature Certificate (we can arrange this for you)
For foreign nationals or NRIs
- Passport, with a notarised and, where required, apostilled copy
- Address proof from the home country, also notarised or apostilled
- Any additional declaration the registry asks for at the time of filing
For the registered office
- Latest electricity, water, gas or telephone bill of the premises (not older than two months)
- If rented: a rent agreement together with a no-objection letter from the owner
- If owned by a director or relative: a proof of ownership plus a consent letter
Business information we will ask you for
- Two or three preferred company names, in order of priority
- The main activities the company will carry on (these go into the objects clause)
- How much share capital to start with, and who holds how many shares
- Who will be the directors and, if you want, which of them will hold the managing role
How the process works
Plan the structure 1 to 2 days
We confirm directors, shareholders, share split and registered office, and check that the proposed name is not too close to an existing company or trademark.
Digital signatures and director IDs 1 to 2 days
Every director and subscriber needs a Digital Signature Certificate. New directors receive their DIN through the incorporation form itself.
Reserve the name 1 to 3 days
The name is proposed in Part A of the SPICe+ form. The registry can accept it or ask for a change, which is why we give it several options.
Prepare and file the incorporation forms 2 to 4 days
We draft the e-MoA and e-AoA, complete Part B of SPICe+, attach the address proofs and pay the stamp duty and fees, which depend on your state and capital. We also apply for the linked PAN, TAN and, where relevant, PF, ESIC and GST registrations through the connected form.
Registry review 3 to 7 working days
The registrar examines the filing. If something is unclear they raise a query and we respond on your behalf.
Certificate of Incorporation On approval
On approval you receive the certificate with your CIN, along with PAN and TAN, and the company legally exists from the date on it.
Start-up formalities First 30 to 180 days
Open the company bank account, bring in the subscribed capital, hold the first board meeting and complete the first set of statutory filings listed below.
How long it takes
| Document collection and digital signatures | 1 to 3 days |
| Name proposal and approval | 1 to 3 days |
| Drafting and filing SPICe+, e-MoA, e-AoA | 2 to 4 days |
| Registry examination and approval | 3 to 7 working days |
| Overall, if documents are complete | Roughly 10 to 20 working days |
These are typical ranges, not promises. A name query, an incomplete address proof or a registry backlog can add a few days.
What the company must do after incorporation
Getting the certificate is the beginning, not the end. These are the main obligations to plan for.
- Within 30 daysHold the first board meeting and appoint the first auditor, who files Form ADT-1.
- Within 180 daysReceive the subscribed share capital from the subscribers and file the commencement of business declaration (Form INC-20A). Until this is done the company should not begin business or exercise borrowing powers.
- Every yearHold an annual general meeting, get the accounts audited, file the financial statements (AOC-4) and the annual return (MGT-7 or MGT-7A), and complete director KYC (DIR-3 KYC).
- Tax and other registersFile the income tax return (ITR-6), deduct and deposit TDS if applicable, register for GST when turnover or the nature of supplies requires it, and maintain the statutory registers and minutes.
Private limited company compared with the other common structures
| Private Limited | LLP | One Person Company | Proprietorship | |
|---|---|---|---|---|
| Liability of owners | Limited to shares | Limited to agreed contribution | Limited to shares | Unlimited |
| Minimum people | 2 directors, 2 shareholders | 2 partners | 1 member plus a nominee | 1 |
| Outside equity funding | Straightforward | Uncommon | Limited | Not possible |
| Annual audit | Always | Only above prescribed limits | Always | Only if tax audit applies |
| Yearly ROC filings | Yes | Yes | Yes | None |
| Best for | Startups and growing businesses | Professional firms, small partnerships | Solo founders wanting a company | Freelancers and small traders |
Frequently asked questions
Is there a minimum capital requirement?
No. The law does not prescribe a minimum paid-up capital for a private limited company. What you choose should reflect your real funding needs, because it affects stamp duty and your credibility with banks.
Can a foreign national or an NRI be a director?
Yes. A foreign national can be a director or shareholder, but at least one director must be a resident in India, meaning someone who has stayed in India for at least 182 days in the previous calendar year. Foreign documents need to be notarised and, in most cases, apostilled.
Can I use my home as the registered office?
Usually yes. You need a recent utility bill for the property and, if it is not in your own name, a no-objection letter from the owner. Some landlords and housing societies restrict commercial use, so check first.
What if my first-choice name is rejected?
That is why we propose more than one. If every option is refused we revise the name and resubmit, which adds a few days but does not mean starting over.
Can one person own the whole company?
Not in a private limited company, which needs at least two shareholders. A single founder can look at a One Person Company instead, or add a second shareholder who holds a small, genuine stake.
Do I need to file returns if the company has no income?
Yes. Annual accounts, the annual return and income tax return must still be filed. Skipping them leads to additional fees per day of delay, and repeated default can lead to the company being struck off and the directors being disqualified.
This page is general information to help you prepare, not legal, tax or professional advice for your situation. Rules, forms, thresholds and due dates change, so we confirm the current position before we file anything for you. Taxswami Consultants is an independent professional services firm and is not a government body.