Document Required for Private Limited Company
Private Limited Company Compliances
- Auditor Appointment: All companies registered in India must appoint
a practicing and licensed Chartered Accountant registered with the ICAI within 30 days of
incorporation.
- Director DIN KYC: All persons who hold a Director
Identification Number (DIN) – which is allocated during the incorporation process must complete DIN
KYC each year to validate the phone and email address on record with the Ministry of Corporate
Affairs.
- Commencement of Business: Within 180 days of
incorporation, the company must open a Bank Current Account and the shareholders must deposit the
subscription amount mentioned in the MOA of the company. Hence, if the company was to be
incorporated with a paid-up capital of Rs. 1 lakh, then the shareholders must deposit Rs. 1 lakh in
the Company’s bank account and file the bank statement with the MCA to obtain a commencement of
business certificate.
- MCA Annual Filings: All companies registered in India
must file a copy of the financial statements with the Ministry of Corporate Affairs each financial
year. If a company is incorporated between January – March, the company can choose to file the first
MCA annual return as a part of the next financial year’s annual filing. MCA annual return consists
of Form MGT-7 and Form AOC-4. Both these forms must be digitally signed by the Directors and a
practising professional.
- Income Tax Filing: companies must file an income tax
return using Form ITR-6 each financial year. Income tax filing must be done for each financial year
before the due date – irrespective of the incorporation date. The income tax return of a company
must be digitally signed using one of the Director’s digital signature.
Advantages Of Private Limited Company
- Separate Legal Entity : A company is both a legal entity and a
juristic person. Therefore, a company has broad legal rights to like acquiring property, incurring
debts, hiring people, etc. As a company is a separate legal entity, the company's members
(shareholders or directors) are not personally liable for the company's liability.
- Limited Liability : A private limited company is a separate legal
entity with limited liability provisions. Therefore, the shareholders are not liable for the losses
of the company – for an amount more than what was invested by them into the company as share
capital.
- Uninterrupted Existence : A company has 'perpetual succession,'
which means it will continue to exist until it is legally dissolved. Because a company is a separate
legal entity, it is unaffected by the death or other departure of any of its members, and it
continues to exist regardless of membership changes.
- Fund Raising : A private limited company has multiple options for
fundraising. A company can raise funds from shareholders, investors, angels, venture capital funds,
private equity funds, foreign funds, NBFCs, banks and other financial institutions. Only a company
can raise debt and equity funds from investors.
