A private limited company, as the name suggests, is a private business organization. The word limited in private limiter company states that the business organization has limited liability. In other words, the shareholder of the company won’t be liable to pay any amount over the face value of the company. Converting your business organization into a Pvt. Ltd. Company has many perks. Like a company is considered as a separate legal entity, it has limited liability (as explained above), it has its own capacity to sue and to be sued, it can raise funds, dual relationship, etc. You can have all these benefits by converting your organization into a private limited company. Private limited company registration is not a difficult task. It just has to follow a few steps in sequence and fulfill some formalities.
By following the steps given below, you can convert your business into a private limited company:
Different types of businesses and organizations have different types of requirements. And so is in the case of a Pvt. Ltd. Company registration.
- Members and directors of the company:
To convert your organization into a Pvt. Ltd. Company. Should have the required number of members and directors. The number limits of members range from 2 members to 200 members. In simple words, a company should have at least 2 members and can have a maximum of 5 members. In the case of directors, the directors of a company are required to have DIN. DIN stands for a director identification number. Along with this, at least one director of the company should have fulfilled the requirements to become an Indian resident. These are the compulsory requirements to be fulfilled as per the companies act, 2013.
- Name and activities of the company:
For a company to be registered, it should have a unique name. As a company is known as a legal person. Like every other person, a Pvt. Ltd. Company should have a unique and different name to act in its capacity. But there is one thing to remember, a company can not have a name that is already taken by any other company. Along with the name, the activities of the company are also to be disclosed to ensure that it won’t be involved in any illegal activity. And yes, do not forget to add the “private limited company” to add at the end of the name of the company.
- The registered office of the company: a company is also required to have registered its office for communication purposes. It should be registered in the city where its main activities shall be conducted. Main activities mean the activities of its main business.
- Obtaining other documents:
Once a company has performed the all above-mentioned steps it is required to obtain some documents also. Like PAN card, GST number (if required), TIN, etc. To verify its existence. It also needs to appoint professionals like CA, CS, CMA, CFO, CEO, etc.
All the steps mentioned above are to be performed carefully for a Pvt. Ltd. Company registration.