Registration of a Limited Company

What is a limited company?

Simply put any private or public company limited by shares or guarantee is a limited company.
Private company means the company which in its articles

• Restricts transferability of its shares
• Limits members to 200(Except One person Company)
• Prohibits invitation to the public to subscribe to its securities

A public company is a company which is not a private company and a company which is a subsidiary of a public company

Advantages of a limited company

Registration of a company as a limited company has the following advantages

• Limited Liability – Liability is limited to the amount guaranteed or amount unpaid on calls, this helps a great deal as your personal assets cannot be called up at the time of liquidation.
• Separate legal entity – It is an artificial person under the eyes of the law and has a separate legal entity
• Perpetual -existence – A company incorporated stays forever unless and until it is been liquidated
• Transferability of shares –For any public company there is free and easy transferability of shares
• Capacity to own –It can own assets in its name, can sue and be sued.
• Borrowing capacity – Being public limited company, it is allowed to raise funds from the public and also have better borrowing avenues.

Disadvantages of a limited company

• Privacy – As a limited company you will be governed by various tax laws and compliances, maintaining complete privacy wouldn’t be possible
• Cost – Difficult to establish, maintain and wind up as reporting requirements are complex and numerous
• Taxability – Tax on dividends (DDT) as well as profits to be paid

Why should you incorporate a Limited Company?

Everybody needs protection against unlimited liability and will try to limit the risk against personal assets; therefore it is important that entity provides limited liability coverage to its shareholders.

• Employee Stock option Schemes
  Only limited and private limited companies can provide employee stock option schemes which play a very good role in satisfying the morale of employees.
• Funding
  Growing a business requires funding from various sources i.e. self-funding, public money, debt, and loans – Limited company is the best option for any growing business as it is easier for attracting funds.
• Transparency and availability of information
  Any stakeholder would like to know the details of your company before making any investment or contracts, as limited companies are governed by MCA, their financial statements can be easily accessed by MCA portal for knowing their financial stand.
• Opportunities for Amalgamation, Joint-ventures
  It will have an opportunity to sell and acquire shares of other companies and gain a strategic edge over its business

Procedure of limited company registration/ limited company incorporation.

• Deciding upon a name –Company name should be selected which is indicative of main objects of the company and which has no resemblance to an already existing name of the company.
• Reserve Unique Name service can also be used for reserving the name of the company
• DSCs should be prepared and registered in MCA portal through www.mca.gov.in
• Once names are approved you can proceed with filing of SPICe forms for Incorporation of company
• Receive the certificate of Incorporation on its successful approval.

SPICe INC-32
EForm SPICe (INC-32) provides for single application for
• Reservation of name,
• Incorporation of a company,
• Application for DIN,
• Application for PAN as well as TAN.
This eForm is accompanied is also accompanied by supporting documents such as details of Directors/subscribers, MoA and AoA etc. Once this eForm is processed and found complete in all respects, company would be registered and CIN would be allocated. DINs are issued to the proposed Director whereby maximum 3 Directors are allowed for using this integrated form for filing application of allotment of DIN while incorporating a company. PAN and TAN would also get issued to the Company.

Mandatory Attachments
• Declaration by first subscribers and directors
• Proof of office address
• Utility bills not older than 2 months
• Approval of owner of the trademark if registered name is based upon a registered trademark
• The interest of first directors in other entities
• Identity proof and residential address proof of the subscribers

SPICe MOA (INC-33) and SPICe AOA (INC-34)
Details of MOA and AOA to be entered in the forms, these are electronic drafted MOAs and AOAs, there is no need for separately attaching the physical copies.
These forms are then required to be submitted online through MCA portal
Chance for Resubmission
On any discrepancy found one chance of resubmission is allowed through which we can submit the rectified form after correcting the specified deficiencies.

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