Private limited company registration is the process of incorporating a company under the Companies Act, 2013 so that your business becomes a separate legal person with limited liability for its shareholders. It is the structure most founders choose when they plan to hire, raise outside money or sign contracts with larger customers, and the whole application is filed online with the Registrar of Companies through the MCA portal.
What is a private limited company?
Under section 2(68) of the Companies Act, 2013, a private company restricts the right to transfer its shares, limits its members to 200 (excluding employees and certain former employees) and cannot invite the public to subscribe to its securities. Because it is a distinct legal person, it can own property, borrow, sue and be sued in its own name, and the shareholders are liable only up to the unpaid amount on their shares.
Most small and growing businesses pick this form because of the balance it offers. Compared with a partnership firm or sole proprietorship, it gives liability protection and perpetual succession. Compared with a public limited company, it carries lighter governance requirements, for instance no mandatory independent directors below the prescribed thresholds and a simpler board structure.
Incorporation is done through SPICe+, an integrated web form that bundles name reservation, DIN allotment for first directors, PAN, TAN and, for companies incorporated after February 2020, registration with EPFO and ESIC and a bank account through the AGILE-PRO-S form. You do not have to apply to each department separately, which is why a well-prepared filing can be completed without visiting any government office.
Who should choose a private limited company?
This structure suits you if one or more of the following describes your plan:
- Founders planning to raise equity from angels, venture funds or strategic investors, who almost always invest only in companies
- Businesses that want limited liability because they take on debt, lease premises or deal with vendors on credit
- Start-ups that intend to apply for Startup India recognition and its tax and compliance benefits
- Service and technology businesses expecting enterprise customers who prefer contracting with a registered company
- Family businesses that want succession through share transfer rather than re-drafting a partnership deed
- Exporters and importers who will need an Import Export Code and banking credibility
Benefits of Private Limited Company Registration
Limited liability
A shareholder's exposure is generally limited to the unpaid amount on shares held. Directors are also not personally liable for ordinary business debts, though they remain accountable for statutory defaults and fraud.
Separate legal identity
The company holds assets, bank accounts and contracts in its own name. It continues even if a founder exits, dies or sells shares.
Fund-raising readiness
Equity shares, preference shares, convertible instruments and employee stock options can be issued within the framework of the Act and the company's articles.
Credibility with banks and customers
A CIN, a registered office and filings on the MCA register are visible to anyone who searches, which helps in vendor onboarding, tenders and credit assessment.
Flexible ownership
Shares can be transferred, subject to the articles, without dissolving the entity. Founders can bring in co-founders and investors in stages.
Tax flexibility
A company is taxed as a separate assessee. Your choice of concessional regimes and treatment of salary, dividend and retained profit should be modelled with your accountant before you finalise the structure.
Eligibility & structural requirements
The Companies Act sets a small number of conditions, most of which are checked by the Registrar during SPICe+ scrutiny:
- At least two subscribers to the MoA (individuals or bodies corporate) and a maximum of 200 members
- At least two directors, and at least one director who is resident in India, meaning a stay of 120 days or more in the previous financial year as per the Act
- Each director needs a DIN and a Digital Signature Certificate; the SPICe+ form can allot DIN to the first directors
- A registered office address in India, which can be a rented or owned premises or a residence, with proof of occupancy
- A name that is unique, not identical or too similar to an existing company or trademark, and ending with the words 'Private Limited'
- Main objects in the MoA that are lawful and consistent with the business you will actually carry on
- No minimum paid-up capital, though authorised capital must be stated and drives the stamp duty
Documents required
For each director and subscriber (Indian national)
- PAN card
- Aadhaar card or other identity proof such as passport, voter ID or driving licence
- Address proof such as a bank statement or utility bill not older than two months
- Recent passport-size photograph and specimen signature
- Valid email ID and mobile number, which receive OTPs and notices
- Digital Signature Certificate in the name of each proposed director
For foreign directors or subscribers
- Passport, with notarised or apostilled copies as required by the Rules
- Address proof from the home country, also notarised or apostilled
- Business visa details where the subscriber is a foreign individual wishing to use the e-MoA route
Registered office documents
- Electricity, water or gas bill, or a property tax receipt, not older than two months
- Rent agreement if the premises are rented, otherwise the ownership document
- No-objection certificate from the owner permitting use as the registered office
- Notarisation of the rent agreement or NOC is advisable, since this is a frequent query point
Company documents prepared by us or your adviser
- Memorandum of Association and Articles of Association, in e-form where eligible, otherwise as signed PDFs
- Declaration by subscribers and first directors (INC-9) and other declarations as required in SPICe+
- Bank details and specimen signatures for AGILE-PRO-S account opening
- Consent to act as director (DIR-2) forms generated within the filing
Step-by-step private limited company registration process
The sequence below reflects how a typical SPICe+ filing runs from name to certificate. Skipping the planning in steps 1 to 3 is the most common source of later rejection:
Decide structure and shareholding
Fix the number of directors, the share split, authorised capital and who holds what. Ask whether a founders' agreement is needed before the share split is written into the AoA.
Obtain Digital Signature Certificates
Every director and each subscriber who signs electronically needs a DSC. Arrange a digital signature certificate early, because token delivery and video verification can take a couple of days.
Reserve the name in SPICe+ Part A
Submit up to two proposed names with the main objects, checking them first on the MCA name search and the trademark register. The fee is ₹1,000 and an approved name remains valid for 20 days, so file Part B within that window.
Prepare MoA, AoA and office proof
Draft objects, capital clause and articles that match your shareholding and any investor expectations. Collect the utility bill, rent agreement and owner NOC so the address documents are consistent with the form.
File SPICe+ Part B with AGILE-PRO-S
Enter director and subscriber details, attach e-MoA and e-AoA where eligible, apply for PAN and TAN, and complete the EPFO, ESIC and bank account sections. Attach INC-9 and other declarations and affix DSCs.
Pay stamp duty and fees
The portal computes state stamp duty on the MoA and AoA based on the state of registered office and authorised capital. MCA fee is nil up to ₹15 lakh authorised capital, so stamp duty is usually the main government outlay.
Handle ROC queries
If the ROC raises a query, you can resubmit; the form allows two resubmissions. Respond with corrected documents and a short covering explanation rather than re-filing the whole application.
Receive Certificate of Incorporation
On approval you receive the certificate with CIN, and PAN and TAN follow through the same process. The bank account opened through AGILE-PRO-S needs your physical documents and KYC at the branch.
Complete first-month formalities
File INC-22 if the registered office differs from the correspondence address and is not already covered, hold the first board meeting, appoint the first auditor and plan the INC-20A declaration for commencement of business.
Government fees and statutory charges
The government cost of incorporation depends on authorised capital and the state where the registered office sits. The figures below come from MCA's published SPICe+ FAQs; items marked variable should be read from the portal at the time of filing.
| Item | Amount | Note |
|---|---|---|
| MCA incorporation filing fee | Nil | Where authorised capital is up to ₹15,00,000; higher capital attracts fees per the Companies (Registration Offices and Fees) Rules |
| Name reservation (SPICe+ Part A) | ₹1,000 | Name approval is valid for 20 days |
| PAN application via SPICe+ | ₹66 | Charged through the form |
| TAN application via SPICe+ | ₹65 | Charged through the form |
| State stamp duty on MoA and AoA | Varies by state | Calculated automatically by the portal; differs between Delhi, Uttar Pradesh, Haryana and other states |
Professional charges are quoted separately after reviewing your case. Government fees are paid directly to the authority.
How long does private limited company registration take?
There is no fixed statutory turnaround for SPICe+, and approval depends on the Registrar's scrutiny and whether queries are raised. A clean filing with consistent documents can move quickly, while name objections or address mismatches add rounds. Plan on the stages below as a working guide, not as a promise.
| Stage | Typical time |
|---|---|
| DSC and document preparation | 1 to 3 days |
| Name approval (Part A) | Usually within a few working days |
| SPICe+ Part B scrutiny | Depends on ROC; each query adds a resubmission cycle |
| Bank account activation after incorporation | Depends on the bank and KYC visit |
Validity & continuing existence
A company's registration does not expire and it continues until it is wound up, struck off or amalgamated. However, existence on paper is not the same as being in good standing. If annual financial statements and annual returns are not filed, the company can be marked as defaulting, directors can face disqualification, and in serious cases the Registrar can begin strike-off proceedings. Think of the registration as a permanent entity with recurring compliance obligations attached.
Compliance after incorporation
- Open the current account and deposit subscription money, then file INC-20A declaration of commencement of business within 180 days as per section 10A
- Hold the first board meeting within 30 days of incorporation and appoint the first auditor (Form ADT-1); see auditor appointment ADT-1
- Hold at least four board meetings a year, with a gap of not more than 120 days between two meetings, as required by section 173
- Hold an annual general meeting and file financial statements (AOC-4) and annual return (MGT-7); see ROC annual filing
- Every director must complete DIN KYC (DIR-3 KYC) each year
- Maintain statutory registers, minutes and share certificates; see secretarial records
- File PAS-6 reconciliation where applicable and DPT-3 for outstanding receipts and loans
- Register for GST, PF, ESIC and professional tax as your activity requires
Private Limited Company vs LLP vs One Person Company vs Partnership
| Point | Private Limited | LLP | OPC | Partnership Firm |
|---|---|---|---|---|
| Legal status | Separate legal entity | Separate legal entity | Separate legal entity | Not separate from partners |
| Liability | Limited to unpaid share capital | Limited to agreed contribution | Limited to unpaid share capital | Unlimited and joint |
| Minimum members | 2 shareholders, 2 directors | 2 partners | 1 member, 1 director, 1 nominee | 2 partners |
| Investor appeal | High, equity and ESOPs available | Limited, no shares | Low | Very low |
| Governing law | Companies Act, 2013 | LLP Act, 2008 | Companies Act, 2013 | Partnership Act, 1932 |
Common mistakes & rejection reasons
Names too close to an existing brand
A name that is phonetically similar to a registered trademark or an existing company draws an objection. Run the MCA name search, a trademark search and a domain search before you file Part A.
Address proof mismatches
A utility bill in one person's name, a rent agreement in another and an NOC that does not mention the company produce queries. Ensure the address spelling is identical across documents.
Objects that do not match the business
Generic or copy-pasted objects, or a main object that conflicts with the NIC code selected, are flagged. Write objects around the business you will start with, plus a controlled set of ancillary objects.
Wrong capital and shareholding clauses
Authorised capital that is lower than subscribed capital, or a subscription that does not match the MoA, causes rejection and extra stamp duty.
DSC and name differences
If the director's name on the DSC differs from PAN or Aadhaar even in spelling, the form cannot be signed properly. Fix the certificate first.
Ignoring the post-incorporation clock
The first auditor, INC-20A and the first board meeting come in quick succession after the certificate. Missing them early creates avoidable late fees.
Penalties for non-compliance
The Companies Act, 2013 provides monetary penalties and, in some cases, disqualification for non-filing of annual financial statements and returns, for failing to file the declaration of commencement of business, and for furnishing false information at incorporation. Fraudulent incorporation can attract serious consequences under section 7. The exact amounts depend on the provision and the length of delay, so we describe them here qualitatively rather than quote a figure we have not verified for this page.
Practitioner tips
- Reserve the name only when your documents are ready; the 20-day validity is short, and a lapsed name means paying the ₹1,000 fee again.
- Use a registered office address that you can sustain for years. Changing it later requires a separate filing and, between states, an even longer procedure.
- Draft the AoA with the future in mind: transfer restrictions, pre-emption rights and the board composition are far easier to set at incorporation than to change by special resolution later.
- Open the company bank account in the first week and route the subscription money through it; INC-20A needs that evidence.
- A draft Companies (Incorporation) Amendment Rules, 2026 was released for comments in April 2026 proposing changes such as making EPFO, ESIC and bank set-up optional at incorporation. We could not confirm a final notification as of October 2026, so we file under the rules currently in force.
How Lawgical Guru helps
Structure and name planning
We help you decide shareholding, directors and authorised capital, and check name availability against the MCA register and trademarks.
Drafting MoA and AoA
Objects, capital clause and articles are drafted around your business and investor plans instead of a standard template.
SPICe+ filing and query handling
We prepare Part A and Part B, coordinate DSCs and signatures, and respond to ROC queries within the resubmission limit.
Post-incorporation set-up
We assist with INC-20A, first auditor appointment, statutory registers and first board meeting documents.
Linked registrations
GST, Udyam, PF, ESIC and Startup India recognition can be taken up after incorporation, based on your activity.
Private Limited Company Registration: frequently asked questions
What is the minimum capital required to start a private limited company?
The Companies Act, 2013 has no minimum paid-up capital requirement for a private company. You must state an authorised capital in the MoA, which determines stamp duty, but the amount actually subscribed can be small. Many founders start with a modest subscribed capital and increase it as the business needs funds.
How many directors are needed for a private limited company?
A private company needs at least two directors and may have up to fifteen without a special resolution. At least one director must be resident in India, meaning a stay of 120 days or more in the previous financial year. The same person can be both a director and a shareholder.
Can a foreign national or NRI be a director or shareholder?
Yes. A foreign national can be a director, provided at least one director is resident in India, and foreign shareholding is subject to FEMA and sectoral rules on foreign investment. Documents from abroad must be notarised or apostilled, and later foreign investment will involve FC-GPR filing.
Do I need GST registration before incorporating the company?
No. GSTIN is optional in the SPICe+ form, so incorporation does not depend on it. You apply for GST registration after incorporation if your turnover crosses the threshold, you make inter-state supplies, sell on e-commerce platforms or are otherwise required to register.
What is INC-20A and when is it due?
INC-20A is the declaration of commencement of business filed under section 10A of the Companies Act, 2013. It confirms that every subscriber has paid for the shares agreed to be taken. It must be filed within 180 days of incorporation, and it requires proof of the receipt of subscription money in the company's bank account.
What is the stamp duty for incorporating a company?
Stamp duty on the MoA and AoA is a state subject. The SPICe+ form calculates it automatically based on the state of the registered office and the authorised capital. Because the rates differ among Delhi, Uttar Pradesh, Haryana and other states, check the amount on the portal before you finalise the authorised capital.
Can I use my home as the registered office?
Yes, a residential address can be used if there is proof of occupancy and the owner has given a no-objection certificate. You will need a recent utility bill and, if rented, a rent agreement. Local rules or housing society bylaws may restrict commercial use, so confirm this before you file.
How long is a name approved in SPICe+ Part A valid?
An approved name is valid for 20 days from the date of approval. Part B must be filed within that period or the reservation lapses and you would need to apply again with a fresh fee. This is why we suggest finalising documents before submitting the name.
Is an audit compulsory for a private limited company?
Yes. Every company must appoint an auditor and have its accounts audited each year, regardless of turnover. The Act has no turnover-based audit exemption for companies. The first auditor is appointed by the board within 30 days of incorporation and subsequent auditors by the shareholders.
What can I do if I want to convert the company later?
A private company can be converted into a public company, an LLP or, if it meets conditions, back into an OPC. Each route has its own procedure and tax consequences. See private to public company conversion and company to LLP conversion for the details.
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Reviewed by Satyam Gupta, Company Secretary (CS) & Advocate
8+ years of industry experience. This page was last reviewed on 16 October 2026 against the official sources below. Rules and fees change — confirm on the official portal before you apply.