Under the existing Indian Rules & Regulations, a person can incorporate :
What is a Public Limited Company?
A Public Limited Company is a Company limited by shares. In this case, there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager/Officer of such a Company remains unlimited under certain circumstances. The minimum number of shareholders required is 7 (Seven). The Company must have 3 directors and one of them should be resident of India.
Advantages of a Limited Company
It has following advantages:
Disadvantages of a Limited Company
It has the following disadvantages:
What is a Private Limited Company?
Private Limited Company is most common and popular format of legal entity in India. It can have minimum two and maximum 200 (Two Hundred) shareholders. It cannot invite public for subscription of its shares or debentures. Further, the shares of Private Limited Company are not freely transferable under the Companies Act, 2013. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager/Officer of such a Company remains unlimited under certain circumstances. The company need to have minimum two directors and can have maximum of fifteen directors. One of the directors of the company must be Resident in India.
Comparison between Private Limited Company & Public Limited Company:-
|REQUIREMENT||PRIVATE LIMITED COMPANY||PUBLIC LIMITED COMPANY|
|Minimum Paid-up Capital of the Company||NIL||NIL|
|Minimum number of Shareholders||2||7|
|Maximum number of Shareholders||200||No Limit|
|Number of Directors||At least 2 Directors is required. Further, one Director must be Resident in India.||At least 3 Directors is required. Further, one Director must be Resident in India.|
|Quorum||Two members present personally to constitute quorum for any meeting||
(i) Five members personally present (Number of Members less than 1000);
(ii) Fifteen members personally present (Number of Members lie between 1000-5000);
(iii) Thirty members personally present (Number of Members more than 5000).
|Transfer of Shares||Restriction Can be imposed||Restriction cannot be imposed|
PROCEDURE FOR INCORPORATION OF PRIVATE LIMITED COMPANY
The following documents are required to be executed (signed) before they are submitted to the Registrar for incorporation of the Company:-
One Person Company (OPC)
One person Company (OPC) is a legitimate way to form a company with only one member & Director. OPC can work like Proprietorship but it holds the status of company and of course enjoys the benefits that comes with it (limited liability, trust factor, least compliances etc, However, privilege of incorporation of OPC is available only to the Indian Residents.
FAQ ON SETTING UP PRIVATE LIMITED COMPANY.
Is there is any criteria for selection of the Name of the proposed company to be setup?
Yes. The proposed made should not be identical or similar to the existing name of a registered company or LLP or registered trade mark. It is advisable to avoid general name. at the same time the proposed name should disclose the activities of the company as far as it is possible to avoid rejection of name approval application.
Is there any documents which an promoter must have to set up Company ?
What are the documents required to establish identity?
What are the documents required for Residence Proof ?
* should be latest i.e. not older than 2 months.
What are the documents required if the promoter is a corporate body ?
What is Minimum Capital requirement for setting up a Private Limited Company?
There is no minimum threshold to invest in Company.
Why I require Registered Office for my company?
Every company needs to be registered in India must have permanent place of business. In fact, this is the address where all official correspondence takes place during the course of business unless, until the company desires to have different correspondence address. Generally the consultants provide this facility to the companies to begin with. Shifting of registered office within the state is permitted under the Law without much compliance.
Can registered office of the company be at a residential property?
A company shall at all times have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. Having registered office of company located at residential address is not bared under the Companies Act, 2013 but keeping in view the issues faced from local municipality it is always recommended to register your company at non-residential property.
What is time Schedule for Incorporation of Company?
It will depend upon the process you have opted for incorporation of the company. Normally it takes 10 to 15 days of time if the promoters has obtained prior approval of the name (RUN) or otherwise under the SPICE route, the company can be incorporated within 7 days of submission of complete documents.
When can a newly incorporated company commence its business operations?
A company can start its business activities only after bringing Paid up share capital as agreed in MOA & applying for certificate of Commencement of Business. This needs to be done within 6 months from the date of incorporation of company.
What is Difference between authorized capital and paid up capital?
The authorized capital is the capital limit up to which the shares can be issued to the members / public, as the case may be. The paid up share capital is the paid portion of Authorized Capital of the Company.
Can NRIs and foreign nationals or foreign entities register a private limited company in India?
Yes, NRIs, foreign nationals and foreign entities can register a company in India either under automatic route or subject to approval by RBI depending upon the nature of activities being undertaken by the company after its incorporation. However, the Indian company must have one Indian national as one of the director of the company, a registered place of business in India.
How do comply with the legal formalities when the Foreign Nationals (Directors/shareholders) are not stationed in India?
The company can designate Indian director on the board to execute and sign necessary documents and deed on behalf of the company in the regular course of business without Foreign Nationals being physically present in India. Or else, the Foreign Nationals director can appoint "Alternate Director" to act on his behalf. In any case, under Companies Act, 2013, every Company incorporated in India must have one director on the board who must also stay in India for more than 180 days in a year.
Can a Foreign company established its subsidiary company in India?
Yes. A foreign company planning to form a subsidiary in India, in addition to meeting all requirements of forming a company, is required to seek governmental approval before investing in India. Government has altered its Foreign Direct Investment (“FDI”) policy and made investment procedure more liberal. Two routes for FDI have been specified under the policy i.e. Automatic Route and Government Route.
Under automatic route 100% (FDI) is allowed without approval of Reserve Bank of India or Government. The only requirement here is to notify the authority about the receipt of foreign investment.
Government route: Sectors not covered under automatic route requires approval of Government. The extant policy does not permit FDI in Atomic Energy, Gambling, Betting and Lottery business.
What is Company Seal?
The companies have an option to have a comman seal made of metal or any other material to authenticate various contracts and other deeds including share certificates. Common Seal should be adopted by a resolution of the Board (generally First Board Meeting) & impression of seal should be made part of the minutes of the meeting in which it is adopted).
Contact PKP for Incorporation of Company in India
Contact Person : Mr. Prakash k Gupta
Email - firstname.lastname@example.org
Telephone Numbers : +91-11-23312207/ 23328753
Mobile Number : + 91- 9811031841