Step-by-Step Guide: How to Start a Private Limited Company in India?

Start a Private Limited Company in India Online

A Private Limited Company (Pvt Ltd) is one of the most popular business structures in India due to its limited liability protection, separate legal entity status, and ease of raising funds. Entrepreneurs can now incorporate their businesses online with minimal paperwork, ensuring legal compliance and operational efficiency from day one. Whether you're a first-time founder or expanding an existing venture, forming a Private Limited Company offers credibility, limited liability, and structured governance—making it the preferred choice for startups and growing enterprises.

Meaning of ‘Private Limited Company’

A Private Limited Company is a company which is registered under the Companies Act, 2013. According to Section 2(68) of the Companies Act, 2013, a 'Private Limited Company' is defined as a company with a minimum prescribed paid-up share capital, whose articles:

1. Restrict the transfer of its shares, and
2. Prohibits any invitation to the public to subscribe to any securities of the company;
3. Limit the number of members to two hundred, except for a one-person company.

Key Documents for Pvt Ltd Company Setup

To register a Private Limited Company, the applicant is required to upload the following documents while filling out the SPICe+ form:

For Registered office address

1. Latest copy of Electricity bill or Telephone bill or Water Bill

2. NOC from owner of the premises

3. Rent agreement, if premises is rented

For Indian Directors

1. Copy of PAN card (self-attested)

2. Copy of Self attested Aadhar Card

3. Copy of Residential Address (Passport or Voter ID or Driving License)

4. Utility Bill of present residence (Bank Statement or Electricity bill or Telephone bill or Mobile bill; not older than 2 months)

5. One passport size photo.

For Foreign Directors

1. Passport copy both front page and back page with address proof and date of birth duly apostilled in the home country of Director

2. Residence proof which is not older than 1 year- Duly apostilled in the home country of Director

3. Passport size Photo

Pre-Requisites for Incorporating Pvt Ltd. Company

To incorporate a Private Limited Company:

1. It must have at least two directors (individuals) and two shareholders (individuals or entities), along with a registered office address in India to complete incorporation.
2. It can have up to 15 directors. To appoint more than 15, a Special Resolution must be passed by the members.

     Additionally, if a proposed director is a national of a country sharing a land border with India, prior security clearance from the Ministry of Home Affairs is mandatory and must be submitted along with their consent to act as a director.

1. The Companies Act, 2013 mandates that every company must have at least one director who is a resident of India, as per Section 149.

Private Limited Company Registration Fees in India

The registration fees for a Private Limited Company in India depend on several factors including:

• The state of incorporation
• The authorized capital
• Professional fees (if a Company Secretary, Chartered Accountant, or Consultant is involved)
• Any additional certifications required (e.g., digital signatures, PAN, TAN)

Below is a general breakdown of the costs (as of FY 2024-25) based on MCA (Ministry of Corporate Affairs) norms:

Government fees

1. Name Reservation (SPICe+ Part A)

₹1,000 per application

1. Incorporation Fees (SPICe+ Part B)

Stamp Duty: Varies by state

3. DIN (Director Identification Number)

Zero cost when applying through SPICe+ (max 3 DINs)

4. Digital Signature Certificate (DSC)

₹900 – ₹1,500 per director (private vendors)

Note: The government fees is charged on actual basis.

Stepwise Incorporation Process of Private Limited Company Online

Starting a Private Limited Company online in India has become more streamlined than ever, thanks to the digitalisation of company registration processes under the Ministry of Corporate Affairs (MCA). If you're planning to start a Private Limited Company in India, follow this step-by-step guide to ensure a smooth registration process.

Step 1: Choose a Unique Name and Get Name Approval

• Select a unique and meaningful name for your company that complies with the Companies Act, 2013.
• Conduct a name availability search on the MCA (Ministry of Corporate Affairs) portal.
• Apply for name reservation through SPICe+ Part A (Simplified Proforma for Incorporating Company Electronically Plus).
• The Registrar of Companies (ROC) will approve the name, or suggest changes if necessary.

Step 2: Obtain Digital Signature Certificate (DSC)

• All proposed directors and shareholders must obtain a Digital Signature Certificate (DSC) from government-recognized agencies.
• DSC is essential for electronically signing documents during the registration process.

Step 3: Apply for Director Identification Number (DIN)

• Directors must obtain a Director Identification Number (DIN) by submitting the SPICe+ form.
• DIN is a unique number allotted by the MCA to individuals who wish to become directors.

Step 4: Prepare and File Incorporation Documents

• Draft essential documents, including Memorandum of Association (MoA) and Articles of Association (AoA).
• File the incorporation application through SPICe+ Part B along with:
  • MoA and AoA
  • Declaration by directors and shareholders
  • Proof of registered office address
  • PAN and Aadhar of directors
  • Bank statement, electricity bill, or rental agreement for the registered office

Step 5: PAN, TAN & Bank Account Opening

• The application for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) is filed along with the incorporation form.
• After company incorporation, apply for a business bank account.

Step 6: Obtain Necessary Business Licenses & Registrations

• Depending on your industry, you may need additional registrations such as GST Registration, Shops & Establishment Act Registration, or Professional Tax Registration.
• If applicable, obtain sector-specific approvals (e.g., FSSAI for food businesses, Import-Export Code for international trade).

Step 7: Compliance Requirements After Incorporation

• Appoint an Auditor within 30 days of incorporation.
• File Notice of Situation or Change of Situation of Registered Office (Form INC 22) within 30 days of incorporation.
• Conduct the first Board Meeting within 30 days.
• File commencement of business declaration (INC-20A) within 180 days.
• Maintain statutory registers and records as per Companies Act, 2013.
• File Annual Returns (MGT-7) and Financial Statements (AOC-4) annually.

Frequently Asked Questions (Faqs)

1. How much does it cost to open a private limited company in India?

The cost to open a private limited company in India typically ranges from ₹7,000 to ₹15,000, depending on professional fees, government fees, Name reservation and incorporation charges along with PAN/TAN application.

2. Can I register Pvt Ltd by myself?

Yes, you can register a Private Limited Company by yourself through the MCA (Ministry of Corporate Affairs) portal using the SPICe+ form, provided you have Digital Signature Certificate (DSC) for all directors, Director Identification Number (DIN), Proper documents (MOA, AOA, ID/address proofs), Knowledge of filing forms correctly.

However, professional assistance (CS/CA/advocate) is advisable to avoid errors and delays as incorporating the Private Limited Company requires lot of compliances.

3. Is there any minimum capital requirement to incorporate a company under the Companies Act, 2013?

No, there is no minimum capital requirement to incorporate a company under the Companies Act, 2013

Final Thoughts

Starting a Private Limited Company in India involves a structured process under the regulatory framework of the Ministry of Corporate Affairs (MCA). By following the above steps and ensuring compliance with applicable laws, entrepreneurs can establish and operate their businesses smoothly.

Need Professional Help? If you find the incorporation process complex, consult STARTUP MOVERS PVT. LTD. for guidance.