In legal terms, Section 2 (68) of the Companies Act, 2013 defines a private company as: 

“A Company having a minimum paid-up share capital as may be prescribed, and which by its articles:

1. Restricts the right to transfer its shares
2. Except in case of One Person Company, limits the number of its members to two hundred
3. Prohibits any invitation to the public to subscribe for any securities of the company.”

Characteristics of a Pvt Ltd Company:

Now that you know what a private limited company is, the next step is to know the characteristics of such a company:

► Membership: Like any other company, a minimum of two shareholders are required in order to start such a company. But since it remains a small entity, there is also a maximum cap on the number of members fixed at 200. There is also a requirement of two directors to run the company.

► Limited liability structure:  In a private limited company, the liability of each member or shareholder is limited. Therefore, even in the case of loss under any circumstances, the shareholders are liable to sell their own assets for repayment. However, the personal and individual assets of the shareholders are not at risk.

► Separate legal entity: This is a separate legal entity and continues in perpetual succession. This means that even if all the members die, or the company becomes insolvent or bankrupt, the company still exists in the eyes of the law. The life of the company will be perpetual, not affected by the lives of its shareholders or members unless dissolved by way of resolution.

► Minimum paid-up capital: A private limited company requires to have and maintain a minimum paid-up capital of Rs. 1 lakh. It could go higher, as prescribed by MCA from time to time.

Benefits of a Pvt Ltd Company:

► Ownership: As the company’s shares are owned by investors, founders, and management, the owners are at the liberty of transferring and selling their shares to others.

► Less number of shareholders: Unlike a public company that requires seven shareholders, a private limited company can be started with just two shareholders.

► Uninterrupted existence: As mentioned earlier, the company stays a legal entity until it is legally shut down, the company runs even after the death or departure of any member.

Documents Required for Company Registration:

In India, Private Limited company registration cannot be done without proper identity proof and address proof. Identity and address proof will be needed for all the directors and the shareholders of the company to be incorporated. Listed below are the documents that are accepted by MCA for the online company registration process acceptable.

► PAN Card & Aadhar card of the Promoters/Directors

► Address Proof – Bank Statement/Electricity Bill/Telephone Bill of the Promoters / Directors

► Photo Identity Proof – Voter ID/Driving License/Passport of the Promoter/Directors

► Passport of Foreign Nationals & NRIs if any

► Passport-sized photo of Directors

► Latest utility bill such as gas, electricity, mobile, telephone, Internet clearly depicting the address of the proposed premises

► NOC From the owner of the property in case property is owned by 3rd party or copy of rent agreement in case of rented property

Note: 

► Your registered office need not be a commercial space; it can be your residence too.

► For the foreign nationals, apostilled or notarized copy of the passport has to be submitted mandatorily.

How to register a Private Limited Company:

• Step 1: Get a Digital Signature Certificate (DSC) :
  Since the company incorporation process is entirely online, every form must be digitally signed. Hence, the directors/subscribers of the company are required to obtain a DSC. This certificate is mandatory for signing the Memorandum of Association (MoA) and Articles of Association (AoA). The DSC must be issued by a government-recognised certifying authority, and the cost varies depending on the provider.


• Step 2: Apply for Director Identification Number (DIN) :
  Anyone intending to become a director of the company must have a DIN. A single DIN is valid for directorship in multiple companies. The DIN can be applied through the SPICe+ Form by providing details like the director’s name, PAN, Aadhaar, and address proof.


• At the time of incorporation, DIN can be allotted to a maximum of three directors.
• If more directors are required, the company can first be incorporated with three directors and then appoint additional directors later.


• Step 3: Reserve the Company Name : The proposed company name can be reserved through the SPICe+ Form. Applicants can submit two proposed names and are allowed one re-submission in case of rejection. Once approved, the name remains reserved for 20 days, during which the incorporation process must be completed by filing Part B of the SPICe+ Form. Alternatively, applicants may file both Part A (name reservation) and Part B (incorporation) together. If the name gets rejected in this route, the applicant gets two free chances to modify the name without paying the additional ₹1,000 fee. After the second rejection, however, a fresh SPICe+ Form must be filed.This route is usually more cost-effective and faster, with the whole approval process typically taking 2–3 working days.


• Step 4: File SPICe+ (INC-32) : The Ministry of Corporate Affairs (MCA) has simplified incorporation through the SPICe+ Form, which is entirely web-based. Details entered in Part A and Part B automatically flow into other linked forms such as AGILE-PRO, e-MoA, e-AoA, URC-1, and INC-9. After filling, the forms can be downloaded, digitally signed, and uploaded for processing.


• Step 5: File e-MoA (INC-33) and e-AoA (INC-34) : The MoA defines the objectives and scope of the company, while the AoA contains the company’s internal rules and governance framework. Earlier, these documents had to be submitted in physical form, but now they are filed online as linked forms with SPICe+ (INC-32). Both must be digitally signed by all subscribers.


• Step 6: Apply for PAN and TAN : Through the SPICe+ form, applications for PAN and TAN are also made simultaneously. After submission, the system generates the necessary forms automatically. On approval, the applicant receives the Certificate of Incorporation, PAN, and TAN by email. The PAN card is issued directly by the Income Tax Department.

Once approved, the MCA allots a Corporate Identity Number (CIN), which can be tracked on the MCA portal.