FAQ - Private Limited Company Registration in India

The Private Limited Companies rank among the top three most popular categories of companies in India and other countries worldwide. Again, these private limited companies are found in bulk numbers in every major and most significant sector of occupation and economy. Hence, naturally, the private limited companies of India have been substantially helped (in their formation and incorporation, management, and business growth) by our world-famous law firm of Delhi. To help Indian and foreign visitors pertaining to various economic sectors, being presented below is the pivotal information about incorporation of private limited companies in India.

What is a Private Limited Company?

Run and managed privately by its directors and shareholders, a private limited company is not entitled to sell its shares to outside public investors and hence, it cannot trade on the stock exchanges, like the public limited companies do. Consequently, a private limited company is required to make much lesser administrative and financial disclosures to, and regulatory and annual compliances with the concerned authorities than those performed strictly by the public limited companies. Again, the shareholders of a private limited company in India, could be natural persons or companies, including the foreign companies.

Is a Private Limited Company Suitable for making FDI in India?

Yes, immensely suitable!The private limited companies have been a hugely popular form of business entity amid foreign investors for making the direct foreign investment (subject to FDI Guidelines) in any country, by means of a wholly-owned subsidiary, a joint venture, etc.

Can a Foreign National/Company be a Director/Shareholder in any Private Limited Company in India?

Yes. Any foreign national or company, or an NRI (non-resident Indian) can become a director, or hold share of a private limited company in India. But, at least one director on the Board of Directors of a private limited company in India must be a Resident in India. However, holding shares of a private limited company in India by foreign nationals/companies will be subject to the contemporary FDI Guidelines of India.

What are the Primary Requirements for setting up a Private Limited Company in India?

The statutory requirements for the incorporation of a private limited company anywhere in India, are the following:
  • A minimum of Two Directors and Two Shareholders (The Directors can also be Shareholders). The maximum number of shareholders in a private limited company in India has been extended to 200 (from 50) under the new Indian Companies Act of 2013.
  • No governmental recommendation regarding the Minimum Paid-up Share Capital required for incorporation of a private limited company anywhere in entire India, as per the latest Companies (Amendment) Act of 2015. The mandatory requirement of getting the certificate for business commencement has also been repealed by this Amendment Act of 2015.
  • Xerox copies of the PAN Cards of the Directors/Shareholders (Indian Nationals) or Copy of Passport (Foreign Nationals).
  • DINs (Director Identification Numbers) and DSCs (Digital Signature Certificates) of the Directors.
  • Xerox copies of the Identity Proof and Address Proof of All Directors.
  • Address Proof of the proposed Registered Office of the company (along with the No Objection Certificate from Landowner, etc.)

What is the general Procedure for Incorporating a Private Limited Company in India?

After obtaining the DSCs and DINs, the next task is to ensure the availability of the proposed name of the private limited company through filing the Form INC-1. Then, drafting appropriate Memorandum of Association (MOA) and Articles of Association (AOA) of the company will be made. And, finally, Form INC-29 will be filed with the concerned ROC for incorporation of the proposed company, together will all required documents.

What is the Tentative Time-period Lapsed in the Incorporation of a Private Limited Company in India?

Based on the requirement of obtaining diverse requisite documents, authenticity of the documents submitted by the directors/shareholders, the speed of processing and filing forms & documents, and the briskness of the proceeding performed by the concerned government authorities, the approximate time taken by the entire procedure for incorporation may range from One to Two Weeks.

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