A Private Limited Company (Ltd) is the most accepted corporate legal body in many countries. The registration of Private Limited Company is managed by Companies Incorporation Rules and Ministry of Corporate Affairs, Companies Act jointly. If you are in India, searching with the phrase private limited company registration on the Internet can be helpful. The main reason to register a private limited company is to reduce the financial responsibility of the people who own the business and beside of the obvious benefits of personal financial protection. The ownership of the company is controlled and managed by one or several individuals and not by public. It develops the new business to reach the perfection on the top business financial market and corporate sector.
This is very important for any businessman to satisfy all legal requirements as it helps the business to be launched successfully in the market. If you are an entrepreneur then you want to set- up your business, commence it smoothly and properly register it without any legal issues. It is important to use the correct procedure of private limited company registration. It is important to use the correct procedure of private limited company registration online. If you are an entrepreneur then you want to set- up your business, commence it smoothly and properly register it without any legal issues. It is important to use the correct procedure of private limited company registration. Documents Required Private Limited Registration Passport size photograph of directors Copy of PAN Card of directors Photo Copy of Property papers in case of owned property Water or Electricity bill of Business place No Objection Certificate from landlord (format will be given) Copy of voter identity card or aadhaar card of directors Photo Copy of rent agreement in case of rented property Easiest way to Private Limited Company Registration online and it takes 10 to 15 days for registration that you can find at One Click Business Solution. We also perform private limited company registration online process to make it easier with just a few clicks.
A private limited company is the most common form of business entity prevalent in India. It is very easy to register, start, maintain and raise funds. A private limited company offers limited liability to its members, ensuring flexibility and assuring easy bank loan accessibility. Obtain Digital Signature Certificate Digital signature certificate of the personnel is needed in Private Company Incorporation in India. The digital signature certificate is required for filling of e-forms online on the portal of MCA (the Ministry provided portal for online registration). Digital Signature Certificate is issued by the Certifying Authority in token form. It is valid for 1 or 2 years. List of documents required for digital signature certificate: Passport size photograph of the applicant or applicants Self-attested Address proof of the applicant or applicants Self-attested PAN card of the applicant or applicants Obtaining Director Identification Number Director Identification Number or DIN is a unique identification number given by the Ministry of Corporate Affairs to the individual or in duals applying for the allotment of DIN.
The number is assigned to an Ltd for a lifetime by the Ministry unless the holder or holders surrender or withdraw it. The director or directors of a company shall receive and intimate the DIN during the time of Private Ltd company incorporation. Getting DIN is mandatory for getting an appointment as Director in any Company. The director or directors can use the DIN number for other company formation. He/she/they can get an appointment as Designated Partner in the LLP. List of documents required for digital signature certificate: Passport size photograph of the applicant or applicants Self-attested address proof of the applicant or applicants Self-attested PAN card of the applicant or applicants.
Let us first know what both these types of companies actually means. Pvt. Ltd. Company means private limited company, is a type of company which involves privately held small business entity, in which the liability of the owner is limited to its shares and the firm as a whole is limited to having at most 50 shareholders.The shareholders are prohibited from publicly trading the shares. LLP: A Limited Liability Partnership or (LLC in the United States) is a kind of partnership in which either all or a few partners have limited liabilities. It therefore displays elements of both partnerships and corporations. In an LLP, one partner is not liable for a misconduct on a fellow partners part.
After having a slight insight of the two, we now list down the major differences between a Private Limited and an LLP and then draw a line as to why the former is preferred over the latter: Limited Liability:- The greatest benefit of a Private Limited Company is limited liability. It is treated as a single entity thus making the company as a whole responsible for all debts. If something happens to the company, the members are not affected at a personal level; members are liable for unpaid shares only. Only in case of Fraud, the members will be held responsible. Funding:- The main advantage of a Private Limited Company over an LLP is that Angel Investors and Venture Capitalists prefer Private Limited Company over any other form of business entity. Since a Limited Liability Partnership cannot issue shares, this kind of entity cannot raise funds in the form of equity. Exit:- Private Limited Company offers the best and simplest exit strategies to the investors. It is as simple as the sale of shares or transfer of the shares in the Private Limited Company.
A shareholder can leave the company as and when he desires just by selling his share in the company. In an LLP, the outgoing partner has to go through a number of consecutive legal steps that have to be completed before he makes an exit. He has to have an assertive agreement with the fellow members. The Legislation offers little help to those who fail to procure an agreement. Foreign Direct Investment:- In case an entity is aiming to attract Foreign Direct Investment in the future, one way forward is to opt for Private Limited Company. It is required to be stated that it is only Private Limited Company which allows the leverage of 100% FDI in the Automatic Route. Conversion:- As the business progresses, if due to any reason the members or owners mutually decide to change the structure of their business, it can only be done if it is a Private Limited Company.
An LLP bars itself from being converted into any other kind of business structure. Tax Advantages:- Private limited companies have major tax advantages. It pays Corporation Tax on their profits but tend to be exempted from higher personal Income Tax. Forming a Private Limited Company instead of an LLP opens door to more tax-deductable costs and allowances that can be redeemed against profits. Boundaries:- In a Private Limited Company, the shareholders are not answerable to the management of the company as they merely hold stakes in the company and they do not have a say in its working.
On the other hand, in an LLP there is no boundary between the management and the owners. Hence, keeping in mind all the aforementioned points, we clearly conclude why people are more inclined towards a Private Limited Company than a Limited Liability Partnership.
