Private limited company is the most prevalent and popular type of corporate legal entity in India the ministry of corporate affairs governs private limited company registration in India. The companies are incorporated and regulated under the companies Act 2013 and the company’s incorporation rules 2014.
Eligibility & requirements
To register a private limited company, a minimum of two persons to act as Directors and shareholders are required. Maximum number of share-holders of Private Limited company can be 50 only. The shareholders of a private limited company can be a corporate entity or a natural person. Director can only be a living person with one Director being a resident and Indian Citizen. There are no restrictions on foreign companies or foreign nationals being Directors or shareholders of a private limited company. As, foreign nationals, foreign corporate entities or NRIs are allowed to be Directors and Shareholders of a Company with Foreign Direct Investment, incorporating a company is the preferred choice of entry to India for foreign promoters.
Importance of Corporate Governance in an Organization
Corporate governance aims to ease effective, entrepreneurial and prudent management that can deliver the long-term success of the company;
The main intention of corporate governance is to have sound management to take out economic efficiency in an organization;
Why corporate governance is important?
Corporate governance provides the benefits of; Risk Mitigation and compliance, Enhances shareholder value, and Better image during economic downturns, etc..
Duties of Directors and Number of Directorships
Affairs of the company are managed by Board of Directors which acts as the governing body of the company.
Directors play a vital role in order to structure the company and known as brain of the company. The Directors are the company’s representative who is accountable to the stakeholders of the company in order to manage affairs of the company. However, shareholders are actual owners of the company, but without directors, it is difficult to run the management of the company
What are various duties and responsibilities that director has been assigned as per companies act, 2013? Duties and obligations of a director have been defined under Section 166 of the companies act, 2013
Section 12 the Companies Act, 2013 says a Registered office of company.—
(1) A company shall, on and from the fifteenth day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it.
(2) The company shall furnish to the Registrar verification of its registered office within a period of thirty days of its incorporation in such manner as may be prescribed.
(3) Every company shall—
(a) paint or affix its name, and the address of its registered office, and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in a conspicuous position, in legible letters, and if the characters employed therefor are not those of the language or of one of the languages in general use in that locality, also in the characters of that language or of one of those languages;
(b) have its name engraved in legible characters on its seal, if any;
(c) get its name, address of its registered office and the Corporate Identity Number along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, bill heads, letter papers and in all its notices and other official publications; and
(d) have its name printed on hundies, promissory notes, bills of exchange and such other documents as may be prescribed:
Provided that where a company has changed its name or names during the last two years, it shall paint or affix or print, as the case may be, along with its name, the former name or names so changed during the last two years as required under clauses (a) and (c):
Provided further that the words ‗‗One Person Company‘‘ shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.
Situation of the registered office
(4) Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within fifteen days of the change, who shall record the same.
(5) Except on the authority of a special resolution passed by a company, the registered office of the company shall not be changed,—
(a) in the case of an existing company, outside the local limits of any city, town or village where such office is situated at the commencement of this Act or where it may be situated later by virtue of a special resolution passed by the company; and
(b) in the case of any other company, outside the local limits of any city, town or village where such office is first situated or where it may be situated later by virtue of a special resolution passed by the company:
Provided that no company shall change the place of its registered office from the jurisdiction of one Registrar to the jurisdiction of another Registrar within the same State unless such change is confirmed by the Regional Director on an application made in this behalf by the company in the prescribed manner.
(6) The confirmation referred to in sub-section (5) shall be communicated within a period of thirty days from the date of receipt of application by the Regional Director to the company and the company shall file the confirmation with the Registrar within a period of sixty days of the date of confirmation who shall register the same and certify the registration within a period of thirty days from the date of filing of such confirmation.
Change of registered office
(7) The certificate referred to in sub-section (6) shall be conclusive evidence that all the requirements of this Act with respect to change of registered office in pursuance of subsection (5) have been complied with and the change shall take effect from the date of the certificate.
(8) If any default is made in complying with the requirements of this section, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees.
Physical verification of the registered office
(9) If the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may cause a physical verification of the registered office of the company in such manner as may be prescribed and if any default is found to be made in complying with the requirements of sub-section (1), he may without prejudice to the provisions of sub-section (8), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.
There is special provision and procedure given in the Companies Act and the same may be confirmed above. If any doubt exists, one may kindly get back to us for proper clarification at all times.
Proof of incorporation of Company
Initially the applicant has to obtain the name of the Company through an online application. After perusal of MOA and AOA the ROC will issue a Certificate of incorporation. The List addresses and signature of subscribers to these two documents is seen. The members must have passed a resolution to take shares of the Company and get it incorporated. The Directors are required to obtain a DIN – Directors Identification Number from the Registrar of Companies.
Documents required to apply for Registration
- Address proof of the Members. (Driving Licence/voter id/Passport)
- Identity proof of the Members. (PAN if Indian nationals)
- Identity proof of the Members. (Passport if foreign nationals)
- Registered office address.
- Bank Statement of Members.
- Lease agreement electricity bill (if Office is rented) (Latest month utility bill)
- NOC form landlord. (In case of own office space)
- Obtaining digital signature certificate.
- Up to 2 name options can be given in 1 RUN name approval request.
- Board resolution authorizing investment in the company.