A private limited company, in other words, a Pvt Ltd company, is a corporate legal entity that is privately owned by a small group of individuals for small business. The liability of the members of a private limited company limits the liability of its shareholders (member) to the amount they have invested in the company. All private companies must include ‘Pvt Ltd’ or 'private limited’ in their company name. ​​Section 2, clause 68 of the Companies Act, 2013, provides the definition of a private limited company. A company is a private limited company when it fulfils the following requirements:

• No Minimum paid-up share capital - It means there is no minimum amount of money that must be invested in a private limited company.
• Restriction of transfer of shares - It means shares of a private limited company cannot be sold or transferred easily without fulfilling certain conditions.
• Number of shareholders - It means the number of members required for a private limited company. The minimum should be 2 ; the maximum can be 200.

Private company compliance requires maintaining records, holding meetings, and filing financial statements to ensure the private limited company operates legally. As a limited liability business, a private limited company is ideal for entrepreneurs who want to minimise personal risk while benefiting from a flexible structure that allows for growth, investment, and protection of personal assets. Shine Legal India provides support to help you manage these processes efficiently.

1. One Person Company - A one person company (OPC) is a special type of private limited company formation that allows a single individual to form and operate a company with limited liability. In an OPC, there is only one shareholder, but it still requires a director to manage the company. This structure is popular among startup legal structures, especially for entrepreneurs who are looking for corporate legal entity status while maintaining limited personal liability.

2. Company limited by shares - A company limited by shares is a private limited company that limits the liability of its shareholders (member) to the unpaid amount on the shares they hold. For example, imagine Rahul is a shareholder who holds 100 shares in a company, each share worth ₹10, and Rahul has already paid ₹5 per share. The liability of Rahul will be limited to the remaining ₹5 per share, meaning if the company is wound up, he owes ₹500 in total.

3. Company limited by guarantee - A company limited by guarantee is a private limited company where the member’s liability is restricted to the amount they have agreed to contribute in case the company is wound up. This amount is specified in the company’s Memorandum of Association (MOA). For example, imagine if the company has 10 members and each member agrees to contribute ₹1,000 in case of the wounding of a company; the total liability would be ₹10,000. However, if the company has assets that can cover the debts, the members don’t need to pay.

• Lesser paperwork- Pvt Ltd Company formation requires less documentation, mainly focusing on essential details like the company name, director information, and shareholder details.
• Limited liability business - The private limited company is a limited liability, which means the personal assets of directors and shareholders are protected.
• Corporate legal entity - A private limited company is a corporate legal entity, meaning it has a separate legal identity distinct from its directors and shareholders.
• Private company taxation- Compared to other business structures like partnerships and sole proprietorships, the taxation of a private limited company is generally more favorable.
• Business incorporation process - The business incorporation process for a private limited company is simple when compared to the formation of a public company.
• Startup legal structure - The private limited company is an ideal choice for startups.

• Private limited company compliance - While the company formation process is well organized, registering a private limited company still involves dealing with various regulations and paperwork, such as annual filings, holding of annual general meetings (AGMs), and regular board meetings.
• Cost of company formation consultant- While business incorporation services can simplify the registration process, hiring a company formation consultant can be an additional cost.

• Digital Signature Certificate (DSC) - The director of the private limited company must have a digital signature for signing electronic documents. The Digital Signature Certificate (DSC) can be obtained by submitting the required forms and documents.
• Director Identification Number - The person who wants to be a director of a private limited company must have a Director Identification Number (DIN). It can be applied online through the Ministry of Corporate Affairs (MCA) portal.
• Name Reservation - For company registration, the name of the company should be unique and not similar to an already existing company or trademark.
• Memorandum of Association - The Memorandum of Association (MOA) is a legal document that outlines the company’s objectives, power, and scope.
• Article of Association - The Article of Association (AOA) defines the internal rules, regulations, and procedures that govern the management of the company.
• Registration of a private company - Once the name of the company is approved, the process of company registration starts. This is done through the Ministry of Corporate Affairs (MCA) portal by submitting forms such as SPICe+, and others.
• Filling out the SPICe+ form - The SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form is the important form for online company registration. The form has sections like
  • Part A, which includes the company name, type (private limited), and business objectives.
  • Part B, which includes director details, address proof, and shareholder (member) details.
• Submission of the form and payment of required fees - Once the SPICe+ form is filed, a fee is to be paid for company registration. The fee can be paid using a debit card, credit card, or net banking through the Ministry of Corporate Affairs (MCA) portal.
• Approval by Ministry of Corporate Affairs (MCA) - After submitting all the required forms and documents, the Ministry of Corporate Affairs (MCA) will verify the details and documents, including the Memorandum of Association and Article of Association of the company. If everything is in order, the Ministry of Corporate Affairs (MCA) will issue a certificate of incorporation. This certificate confirms that a company is legally registered and includes details like the company’s Corporate Identification Number (CIN) and PAN/TAN.
• Post-incorporation process - After company registration, there are some additional steps to comply with, such as
  • Apply for GST registration (if applicable).
  • Opening a bank account

Shine Legal India helps you register your private limited company in India providing step-by-step support throughout the process. The first step in registering your Pvt Ltd company is choosing a unique name. Shine Legal India’s experts will help you pick a unique name that follows Ministry of Corporate Affairs (MCA) guidelines in India. Our team provides personalized advice to match your specific business goals, ensuring an easy online company registration process with clear and upfront fees. Our team helps you with preparing documents, making sure everything is legally compliant at each stage. We provide transparent pricing and keep you updated on your registration progress. Shine Legal India supports you through the company registration process by assisting with legal requirements, allowing you to focus on your business activities.