P K DE & Associates

A Private Limited Company is a Company limited by shares in which there can be maximum 200 shareholders, no invitation can be made to the public for subscription of shares or debentures, cannot make or accept deposits from Public and there are restriction on the transfer of shares.The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. The minimum number of shareholders is 2.

A Public Limited Company is a Company limited by shares in which there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. The minimum number of shareholders is 7.

The choice of entity depends on circumstance of each case. Private Limited Company has lesser number of compliance requirements. Therefore, generally where there is no requirement of raising of finances through a public issue and the ownership is intended to be closely held by limited number of persons, Private Limited Company is the best choice.

The minimum paid up capital at the time of incorporation of a private limited company has to be Indian Rupees 1,00,000 (though it has been omitted by Companies Act 2013). There is no upper limit on having the authorized capital and the paid up capital. It can be increased any time, by payment of additional stamp duty and registration fee.

The authorized capital is the capital limit authorized by the Registrar of Companies up to which the shares can be issued to the members / public, as the case may be. The paid up share capital is the paid portion of the capital subscribed by the shareholders.

An application in Form No. INC-1 needs to be filed with the Registrar of Companies (ROC) online through Digital Signature of one of the proposed director. The details to be furnished in the said application are as follows: Alternative names for the proposed company. (The name can be coined names from the objects of the proposed company or the name of the directors, etc. but should definitely be indicative of the main object of the company. Justification for the name needs to be specified along with the application)
Names and addresses of the promoters (Minimum 7 for a public company while 2 for private company).
Authorized Capital of the proposed company.
Main objects of the proposed company.
Names of other group companies.
On submitting the application, the ROC scrutinizes the same and sends the approval / objections in about 3-4 days to the applicant through e-mail.

The following documents are required to be executed before they are submitted to the ROC:

MOA and AOA – These are required to be signed by the promoters in their own handwriting in presence of a witness stating their full name, father’s name, residential address, occupation and number of shares subscribed for, etc.
Form INC-7-with incorporation of a new company (other than OPC).
Form INC-8 – – This is a declaration to be executed on a non-judicial stamp paper by one of the directors of the proposed company or other specified persons such as Attorneys or Chartered Accountant stating that all the requirements of the incorporation have been complied with.
Form INC22 – This is a form to be filed by one of the directors of the company informing the ROC the registered office of the proposed company.
Form DIR-12 – – This is a consent obtained from all the proposed directors of the proposed company to act as directors of the proposed company. (Not required in case of private company).
FForm DIR-2– This is a form stating the fact of appointment of the proposed directors on the board of directors from the date of incorporation of the proposed company and is signed by one of the proposed directors.
INC-9- Declaration by first directors in case of new company
Power of Attorney signed by all the subscribers of MOA authorizing one of the subscribers or any other person to act on their behalf for the purpose of incorporation and accepting the certificate of incorporation.
Filing fees as may be applicable.

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