What are the advantages of the incorporation of a Private Limited Company in India?
- The limited risk to personal assets The shareholders of a private limited company have limited liability. This means that as a shareholder you will be liable to pay for a company’s liability only to the extent of the contribution made by you.
- Legal Entity A PLC has a separate legal entity different from you. This means that the Company is responsible for the management of its assets and liabilities, debtors and creditors. And you are not responsible for it. So, the creditors cannot proceed against you to recover the money.
- Raising Capital Even though registering a PLC comes with compliance requirements, it is preferred by entrepreneurs as it helps them raise funds through equity, expand and at the same time limit the liability.
- Trustworthiness Companies in India are registered with the Registrar of companies(ROC) under Companies Act 2013. Anyone can check the details of the company through the Ministry of Corporate Affairs (MCA). Also, details of all the directors are provided while the formation of the company. Hence a PLC form of business structure is trusted more.
- Continue Existence A company has ‘perpetual succession’, that is continuing or uninterrupted existence until it is legally dissolved. A company, being a separate legal person, is unaffected by the death or cessation of any member but continues to be in existence irrespective of the changes in membership.
The detailed procedure for approval of the proposed company name:
- For obtaining a name for your new company, An application in Form-1A needs to be filed with the Registrar of Companies (ROC) of the state in which the Registered Office of the proposed Company is to be situated to ascertain the availability of a name along with an official service fee of Rs.500/-.
- You have to provide four alternative names for the proposed company. Your company name shall not resemble the name of any other company already registered or violate the provisions according to Act, 1950.
- In this form, you have to fill the name and addresses of directors (minimum 2 for a private company and 7 for a public company). You have to mention the main objects of the company and authorized capital.
- In about 10 days, the ROC will inform you about approval or objections. If there are any objections then ROC will suggest you with some available names and let you choose among them. If your company name is approved then you will receive a formal letter regarding the confirmation of the same. Keep the same which will be required during the registration process of the proposed company.
- If you find any difficulty or encounter any problem while obtaining the company name then do contact us, We will help you to sort out your problem.
Check these documents before submission of a company:
- DIN of all those directors of a proposed company.
- DSC – Digital Signature Certificate
- Original copy of the formal letter issued by ROC regarding the availability of Company name.
- Form-1 for the incorporation of a company.
- Form-18 for the situation or address of the proposed company.
- Form-32 for particulars of proposed directors, managers and secretary.
Formalities to be followed while the incorporation of a company:
- Obtain a TAN card
- Obtain a Permanent account number (PAN) from the income tax dept. India
- If required: Documents obeying shop and establishment acts.
- If required: For foreign trade, Registration documents of import-export code from Director General of foreign trade.
- If required: Registration documents of Software technologies Parks of India (STPI).
- If required: RBI approval for foreign companies investing in India and FIPB approval.
- Both Indian and foreign directors need to have valid Digital Signature Certificates from authorized agencies.
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