Private Limited Company-Chandigarh (Upto 1 Lac Capital)(Excluding Goverment fees)

Description

Private Limited Company-Chandigarh

Formation of a Private Limited Company in Chandigarh

A private limited company is a popular business structure in India, offering limited liability to its shareholders and a distinct legal identity. Chandigarh, being a hub of business and commerce, sees numerous incorporations of private limited companies. This article outlines the process of forming a private limited company in Chandigarh, adhering to the regulations of the Companies Act, 2013, and the Ministry of Corporate Affairs (MCA).  

Key Requirements:

• Minimum two directors: A private limited company must have at least two directors.  
• Minimum two shareholders: There must be a minimum of two shareholders, who can be the same individuals as the directors.
• Minimum paid-up share capital: Although the Companies Act, 2013, has removed the minimum paid-up share capital requirement of INR 1 lakh, it is advisable to have some initial capital.
• Registered office: The company must have a registered office in India, which will be its official address for all communications.  

Steps for Incorporation:

1. Obtain Digital Signature Certificates (DSC):

   • A DSC is a digital equivalent of a physical signature and is mandatory for online filing of company incorporation documents.  
   • Directors and subscribers to the Memorandum of Association (MOA) need to obtain Class 2 or Class 3 DSCs from a certifying authority authorized by the MCA.  

2. Obtain Director Identification Number (DIN):

   • DIN is a unique identification number allotted to an individual who wants to become a director of a company.  
   • An application for DIN can be made through Form DIR-3 on the MCA portal.  
   • However, with the introduction of SPICe+ form, DIN can be applied for up to three proposed directors in the same form.  

3. Name Reservation:

   • The company name should be unique and not similar to any existing company or trademark.  
   • Applicants can check name availability on the MCA portal.  
   • An application for name reservation can be made through the SPICe+ form (Part A).
   • The name is reserved for 20 days, during which the incorporation process must be completed.

4. Drafting of Memorandum of Association (MOA) and Articles of Association (AOA):

   • MOA: This document defines the company’s objectives and scope of operations. It outlines the company’s name, registered office, objects, liability of members, and share capital.  
   • AOA: This document contains the rules and regulations for the internal management of the company. It covers aspects like share allotment, meetings, directors’ powers, and dividend distribution.
   • Standard templates for MOA and AOA are available, but they can be customized to suit the specific requirements of the company.

5. Filing of SPICe+ Form (Part B):

   • SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) is an integrated web form introduced by the MCA for company incorporation.  
   • Part B of the SPICe+ form is used for:
     • Company incorporation
     • DIN application (up to three directors)
     • PAN and TAN application
     • GSTIN application (optional)
     • EPFO and ESIC registration
     • Opening of bank account

6. Documents Required for Filing SPICe+:

   • Identity proof of directors and shareholders (PAN card, Aadhaar card, Voter ID, Driving License, Passport)  
   • Address proof of directors and shareholders (Bank statement, Utility bill, Telephone bill)  
   • Registered office address proof (Utility bill, Rent agreement, NOC from owner)  
   • Passport-sized photographs of directors  
   • MOA and AOA  
   • Declaration by subscribers and first directors (Form INC-9)  

7. Certificate of Incorporation:

   • After successful verification of the documents, the Registrar of Companies (ROC) will issue a Certificate of Incorporation.  
   • This certificate is conclusive evidence of the company’s existence.
   • The certificate will contain the Corporate Identity Number (CIN), which is a unique identification number for the company.  

8. Post-Incorporation Compliances:

   • PAN and TAN application: Although PAN and TAN are applied for through SPICe+, it’s essential to track their issuance.
   • GSTIN application: If opted for during incorporation, follow up on the GSTIN application.
   • Opening a bank account: Open a current account in the company’s name.  
   • Appointment of first auditors: Appoint the first auditors of the company within 30 days of incorporation.
   • Filing of commencement of business declaration: File Form INC-20A with the ROC before commencing any business activity.
   • Maintenance of statutory registers: Maintain various registers as required under the Companies Act, 2013.  
   • Annual filings: File annual returns and financial statements with the ROC.  

Role of Professionals:

• Chartered Accountants (CAs): CAs can assist with drafting MOA and AOA, filing forms, and ensuring compliance with accounting and tax regulations.  
• Company Secretaries (CSs): CSs can provide guidance on company law matters, assist with incorporation procedures, and handle post-incorporation compliances.  
• Lawyers: Lawyers can help with legal documentation, drafting agreements, and providing legal advice.

Advantages of Forming a Private Limited Company:

• Limited liability: Shareholders’ liability is limited to the extent of their unpaid share capital.  
• Separate legal entity: The company has a distinct legal identity separate from its members.  
• Perpetual succession: The company’s existence is not affected by the death or insolvency of its members.  
• Easy access to funding: Private limited companies can raise funds more easily compared to other business structures.  
• Enhanced credibility: A private limited company enjoys greater credibility among customers, suppliers, and investors.  

Conclusion:

Forming a private limited company in Chandigarh involves a series of steps and compliances. By following the outlined procedure and seeking professional assistance, entrepreneurs can successfully establish their businesses and enjoy the benefits of this structure. The introduction of SPICe+ has significantly streamlined the incorporation process, making it faster and more efficient. It is crucial to stay updated with the latest regulations and guidelines issued by the MCA to ensure compliance and smooth operations.