Private Limited

GBPH > Private Limited

Definition Under the Companies Act, 2013

According to Section 2(68) of the Companies Act, 2013, a Private Company is a company having a minimum paid-up share capital as prescribed, and which by its articles:

  • Restricts the right to transfer its shares.
  • Limits the number of its members to 200 (excluding a One Person Company).
  • Prohibits any invitation to the public to subscribe for any securities of the company.

Note:

  • Two or more individuals jointly holding one or more shares are treated as a single member.
  • Current and former employees who were members during employment are not counted in the member limit.

Minimum Requirements for Private Company Incorporation

  • Minimum of 2 shareholders.
  • Minimum of 2 directors (same persons can be shareholders).
  • Minimum authorized share capital of ₹1,00,000 (or as prescribed).
  • Digital Signature Certificate (DSC) for each proposed director.
  • Director Identification Number (DIN) for each director.

Documents Required

1. Identity Proof:

  • Indian Nationals: PAN card (mandatory).
  • Foreign Nationals: Passport (mandatory).
  • Document must mention date of birth. If not, a certified birth proof must be attached.

2. Address Proof:

Any one of the following (not older than 2 months):

  • Passport
  • Voter ID
  • Ration Card
  • Driving License
  • Electricity or Telephone Bill
  • Aadhaar Card

Steps for Company Incorporation

  1. Obtain DSC: Secure digital signatures for all directors.
  2. Get DIN: Apply for Director Identification Number via eForm DIR-3.
  3. Name Approval: Reserve a unique company name through the RUN or SPICe+ form.
  4. File Incorporation Forms: Submit SPICe+ form along with MoA, AoA, and required documents to RoC.
  5. Certificate of Incorporation: After approval, RoC issues a Certificate of Incorporation with CIN.

Conclusion

A private limited company is one of the most popular and credible business structures in India, suitable for startups and small-to-medium enterprises. With limited liability protection, ease of transferability, and access to funding, it offers a strong legal foundation for growth.

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