Setting up a Private Limited Company is a popular option to start a business in India by startups and businesses with higher growth aspirations. Pvt Ltd company is incorporated under the Companies Act of 2013, and governed by the Ministry of Corporate Affairs (MCA). It is a registered corporate structure that provides business a separate legal identity from its owners. Hence, providing key advantages like the ability to contract in its own name, and safeguard personal assets of the owners from business liabilities.
Advantages of Private Company Registration
There are lot of advantages in registering private company, some of the benefits are mentioned below:
- Easy Fund Raising
Pvt. Ltd. Company registration process is stringent enough to make this structure credible among others which makes fundraising or borrowing from external sources easier. The organisation itself provides a number of ways to raise funds in the form of private equity, ESOP, and more.
- Separate Legal Existence
Once the Company registration in India is done, a legal entity is born in the eyes of law. This separates itself from its owners and managers. The company can operate on its own name simply by opening a bank account to own assets and enter into contract with parties. This also provides the right to sue third parties in case of any defaults.
- Owners’ Limited Liability
The company’s obligation or debts does not create a charge over the owner’s personal assets. Their liability stays limited only to the capital subscribed and unpaid by them.
- Management and Ownership Separation
The separate ownership and management help both – the company and the management to focus on their potential works. The shareholders assign responsibility to operate and run the company without losing control in the form of voting.
Documents Required For Private Limited Company Registration
- PAN Card
- PAN Card of shareholders and Directors.
- Foreign nationals must provide a valid passport.
- Identity Proof
- Aadhar card and Voter ID/ Passport/ Driving Licence of Shareholders and Directors.
- Director’s Address Proof
- Latest Telephone Bill /Electricity Bill/ Bank Account Statement of Shareholders and Directors.
- Photograph
- Latest Passport size photograph of Shareholders and Directors.
- Business Address Proof
- Latest Electricity Bill/ Telephone Bill of the registered office address
- NOC from owner
- No Objection Certificate to be obtained from the owner(s) of registered office
- Rent Agreement
- Rent Agreement of the registered office should be provided if any
- Note
- In case of NRI or Foreign National, documents of director (s) must be notarized or apostilled
Formula of choosing a correct name for Private limited company Registration
The stakeholders including the consumers as well as competitors refer to the company by its name. The name of the company plays a very important role in creating and establishing the significance of its main object in the Market.
A company being Private Limited Company or otherwise, is a separate legal entity established by law, its identity is very different from its members and it holds a distinct position in its own name. A name with some uniqueness and relation with major activities will always assist you with the benefit of establishing a very sound position in the mind of consumers and opponents. Therefore, for easy understanding a name should made up of three components being
- Your brand
- Main business activity
- Constitution
Choosing a name is a crucial part while incorporation and register as a Limited Company. Here know what aspects are to be entertained while choosing the name of the Company!
Formulation of Name
The name of a Company consist mainly 3 parts as mentioned above, which can be explained and rationalised below:
First Part of the name helps the Company to get the distinctive identity apart from other players in the market. This part acting as prefix to the name can be a coined word or an invented word with mixture or combination of two or more of such words which can help to reflect the characteristic of the Services or quality of Goods to be provided by Company or any such terms which are usually used in the industry however unique in nature.
As you never know, when your Company name will become a brand and will be recognized by the unique word chosen as prefix in name. We can see various examples in the corporate world like Reliance, TATA, Larsen & Toubro (L&T) etc. have become brands in their own market by choosing such words which reflect quality, combination or characteristics of Goods and services.
This aids the promoters for easy reservation of the name for the proposed company along with the registration under Trademarks. As stated earlier, this part of the name mostly helps to establish the Brand of the company and therefore it should be coined keeping in mind the requirement of Trademark Registration also, which in future will help for easy Trademark registration in the name of company or the promoters.This aids the promoters for easy reservation of the name for proposed company along with the registration under Trademarks. As stated earlier, this part of the name mostly helps to establish the Brand of the company and therefore it should be coined keeping in mind the requirement of Trademark Registration also, which in future will help for easy Trademark registration in the name of the company or the promoters.
Second Part of the name helps consumers to relate with the field of operations. Targeted consumers can approach the Company by easily identifying the activities of the Company by its name, which helps to indirectly promote the activities of the Company. This will work as a middle part of the name.
The Third Part is the statutory requirement. The company by virtue of its nature and registration under Indian Companies Act, 2013 requires the entities to add the word “Private Limited” or “Public Limited” or “(OPC) Private Limited” at the end of its name, which reflects that the entity is registered with the MCA under the Companies Act. This suffix is used to make third parties and contracting parties to be aware about the constitution of the organisation and liability of members and directors.
Consider following factors before choosing the name to register as a limited company
- Think wisely while choosing your name of the Company keeping in mind that every business you incorporate with a vision of long term growth.
- Easy to spell and remember.
- Short & Simple: The name shall be of reasonable length and not so lengthy.
- Unique: One can use prefix to make the name distinct from others
- Meaning: The name should be such that it helps people to connect with the Company and its branding and help to establish a Brand and Trademark.
- The name should not be such that it is offensive to any religion, caste, race, community, group, society etc.
- It should not be opposed to public policy.
- It should not include any word that can lead to the impression that the entity is having any connection or association with Local/ State/ Central Government.
- The name should not be similar with any existing company/ LLP and also with any Trademark. However, if you are willing to reserve the same name, you can apply the same with the consent of the owner by submission of NOC.
- Not to include any word, prohibited by the Government or any under any law prevailing in India.
- Always try to provide a maximum of six names to your professional to seek the best advice on choosing the name for your Company.
- Requisite of Approval: Names which include words such as ‘Finance’, ‘Bank’, ‘Insurance’, ‘Mutual Fund’, etc., the in-principle approval of concerned Regulatory such as SEBI, RBI, IRDA, etc. is required to be submitted along with the name approval application.
Conclusion
Company registration in India benefits startups since it offers them an advantage over those who have not registered. The process of registering your company is complex and involves many compliances. However, you needn’t worry as long as you have OnlineLegalIndia as professionals that can help you with every step of the private limited company registration process.