Structured Biiz

PRIVATE LIMITED COMPANY​

Who must opt for a Private Limited Company & Why?

A Private Limited Company enjoys the status of being a separate legal entity having perpetual existence, unless dissolved. It can own, sell and transfer property and can also incur debts.

It enjoys a Limited Liability structure benefits, wherein the Owner’s personal assets are not attached to the business liabilities for repaying off the debts or for paying off the creditors.

  1. There are so many ways to raise funds in a Company:

 

  • Funds can be raised through Debt instruments like Convertible Notes (which is available to recognised Start ups), Compulsorily Convertible Debentures, Non Convertible Debentures, Preference Shares (Convertible into Equity) and Share Warrants as well.
  • Venture Capital Investors prefer Private Limited Structure, since they can invest in a Company in the form of so many instruments as described above.
  • Chances of expansion are greater, since it can be converted into a Public Limited Company. Public Limited Company can also be listed on the Stock Exchanges for raising funds from the public.

100% FDI is permitted in a Company under the automatic route barring few sectors wherein permission needs to be obtained for FDI. Companies having 100% FDI are also permitted to invest in another Company or LLP in which 100% FDI is allowed under the automatic route.

Separate Judicial authorities are constituted under Companies Act, 2013. For resolving the dispute matters, there is a National Company Law Tribunal.

  • Functioning of Company is more transparent, since majority administrative decisions are taken collectively in the Board Meetings and the Minutes are also recorded;
  • Directors can be changed & Shareholdering can be transferred, subject to approval of the Board and the Company can still function without any disruption.

Cons

Mandatory Audit, Tax Filing and Secretarial Compliance Filings

  • A Director of the Company can be disqualified for a period of 5 years by the Registrar of Companies, in case the Director has not filed the Financials or Returns for a continuous 3 Financial years.
  • If annual compliance forms are not filed within the due date, there is Rs. 100/- per day penalty fee for not filing annual compliances.

 

For raising of funds, procedural aspects and taxation that may be applicable in the instruments utilised needs to be analysed. Debt & Equity can be issued by following right Issue process (wherein the shares are issued and allot to the existing shareholders of the Company on a rights issue basis) or preferential issue process (wherein the shares are issued to the existing and / or the shareholders other than the existing shareholders of the Company) except the Convertible Note wherein Recognised Start Ups need not had to go through Rights or Preferential Issue Process.

Dissolution is more complex and expensive than formation. So, you must think carefully before you start a Private Limited Structure.

Requirements

  • Minimum 2 Directors
  • Out of 2 Directors, Minimum 1 Resident Director
  • Minimum 2 shareholders / Subscribers who are called the Owners of the Company
  • Authorised Capital – No Minimum Authorised Capital Requirement
  • No Minimum Paid Up capital requirement. However, minimum 1 share is required to be subscribed by 2 subscribers (Shareholders)

Compulsory Compliances

Post Formation Compulsory Compliances

Compliances & Registrations After Formation

  • MCA Filings
  • Accounting & Auditing
  • IT Filing
  • GST Compliances, if registration already obtained
  • MCA Filings that includes filing of forms for:
    Commencement Certificate
    Appointment of Auditors
    DIR-3 KYC of Directors
    Return of Deposits, in case, if any obtained
    Preparation of Statutory Register
    Issue of Share Certificates
    Printing & Payment of Stamp Duty on Share Certificates
    Conducting First Board Meeting within 30 days of incorporation Conducting 4 Board Meetings in a year
    Conducting 1 Annual General Meeting
    Annual Disclosures of interest / non-disqualification by Directors
    Filing of Financial Statements & Returns with the Registrar of Companies
  • Trademark Registration to register Brand name and logo of the Company
  • GST Registration & Compliances
  • Profession Tax filing, in case the Company has hired any employees
  • Trade License, in case of requirement
  • Employees Provident Fund Organisation Registration / Compliances will be applicable once the Company crosses the threshold no of employees i.e., 20 employees
  • Employee State Insurance Corporation Registration / Compliances will be applicable once the Company crosses the threshold number of employees i.e., 10 employees in Other states & 20 in Maharashtra
  • Appointment of a Company Secretary in case Paid-up Capital of a Company exceeds Rs. 10 Crore.
  • & Many More…

Company Formation Package

Rs. 6,899/-

All inclusive

  • Company Formation with Rs. 1 Lac Authorised Capital;
  • 2 Class III Digital Signatures for Directors & Subscribers;
  • Director Identification Number for 2 Directors;
  • Application for the availability of name of the Company;
  • Drafting of Memorandum & Articles of Association of the Company;
  • Preparation and filing of formation documents of the Company;
  • Payment of registration fees to the Registrar of Companies;
  • Obtaining Certificate of Incorporation from the Registrar of Companies;
  • PAN and TAN of the Company
  • GST Registration (Optional)
  • Employees Provident Fund Organisation Registration (Compliances will be applicable once the Company crosses the threshold no of employee i.e., currently 20 employee)
  • Employee State Insurance Corporation Registration – (Compliances will be applicable once the Company crosses the threshold Limit – 10 employees in other states & 20 in Maharashtra)
  • Shops & Establishment Certificate Registration
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Timeline: 10-20 Days
(*Inclusive of Govt. Fees on Form filing. Govt Fees is as applicable in Maharashtra. Govt Fees will vary as per the State and the Govt. fee over and above mentioned herein shall be payable by the Client.)

Request you to provide 2 Unique Names of the Company. In case the name approval is not granted in the first instance, Govt Fee of Rs. 1,000/- and Our Fee of Rs. 999 shall be charged separately for re-application of name.

Post Formation Compliance Package

Rs. 9,999/-*

Inclusive of GST

  • Preparation of documents for opening a Current Account;
  • Filing of Certificate of Commencement of Business;
  • Appointment of First Auditor & filing of document in regard to the same;
  • Obtaining Statutory Declaration from 2 Directors;
  • Filing of DIR-KYC of 2 Directors;
  • Preparation of Statutory Registers;
  • Preparation of First Minutes of the Board Meeting;
  • Issue of Share Certificates;
  • Post Formation Compliance & Licensing Guidance!!
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(*Excluding Govt. fee and reimbursements, if any. and any penalty levied due to delay from the Client's end..)