Incorporating a business in India is one of the most important steps toward establishing a legitimate and scalable enterprise. Among various business structures, the Private Limited Company (Pvt Ltd) is the most preferred by entrepreneurs and investors due to its limited liability, credibility, and growth flexibility.
Understanding the steps to set up a Pvt Ltd company in India ensures that your business starts on a compliant and solid foundation. With the expert guidance of Company Formation India, entrepreneurs can easily navigate legal formalities, documentation, and registration procedures without delay or errors.
WHAT IS A PRIVATE LIMITED COMPANY AND WHY IS IT POPULAR?
A Private Limited Company is a corporate structure registered under the Companies Act, 2013, providing limited liability protection to its owners and a separate legal identity for the business.
It is the preferred structure for startups, SMEs, and growing ventures due to:
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Limited liability for shareholders.
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Ease in raising capital from investors.
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Separate legal entity, enabling contracts in its own name.
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Perpetual succession, meaning the company continues even after directors change.
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Increased credibility in the eyes of banks and customers.
This structure provides flexibility for expansion while ensuring compliance with Indian business laws.
STEP 1: OBTAIN DIGITAL SIGNATURE CERTIFICATE (DSC)
Every director and shareholder must have a Digital Signature Certificate (DSC) to sign electronic documents on the MCA (Ministry of Corporate Affairs) portal.
Documents required for DSC:
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PAN and Aadhaar card.
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Passport-size photo.
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Email and mobile number.
The DSC is usually valid for 2–3 years and must be renewed periodically.
STEP 2: APPLY FOR DIRECTOR IDENTIFICATION NUMBER (DIN)
Next, each proposed director must obtain a Director Identification Number (DIN). It can be applied through the SPICe+ form at the time of incorporation.
The DIN is a permanent number that allows an individual to serve as a director in multiple companies.
STEP 3: NAME APPROVAL FOR YOUR COMPANY
Selecting the right company name is critical. It should:
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Reflect your brand or business activity.
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Not resemble an existing registered name or trademark.
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End with “Private Limited.”
File the name reservation request using SPICe+ Part A on the MCA portal.
Once approved, the name is valid for 20 days to proceed with incorporation.
STEP 4: PREPARE DOCUMENTS FOR INCORPORATION
Once the name is approved, prepare the essential documents:
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Memorandum of Association (MOA) – Defines the objectives of the company.
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Articles of Association (AOA) – Governs company rules and internal management.
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Declaration by directors and subscribers (INC-9).
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Proof of registered office (utility bill, rent agreement, or ownership papers).
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Identity and address proofs of directors and shareholders.
These must be signed and submitted electronically with the incorporation form.
STEP 5: FILE INCORPORATION APPLICATION VIA SPICe+ FORM
The SPICe+ integrated form allows you to complete multiple registrations together — company incorporation, PAN, TAN, EPFO, ESIC, and GST (if applicable).
Steps include:
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Fill out SPICe+ Part B online.
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Upload necessary attachments.
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Pay government fees and stamp duty.
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Submit the form digitally with DSCs.
After verification, the Registrar of Companies (ROC) issues the Certificate of Incorporation (COI) — the official proof of company registration.
STEP 6: OBTAIN PAN AND TAN
With the new SPICe+ system, PAN and TAN are allotted automatically after incorporation.
PAN is essential for taxation, and TAN is required for TDS compliance.
STEP 7: OPEN A CURRENT BANK ACCOUNT
After receiving the COI, PAN, and TAN, you can open a current account in the company’s name.
This account will be used for all financial and operational transactions of the company.
STEP 8: FILE COMMENCEMENT OF BUSINESS DECLARATION (INC-20A)
Within 180 days of incorporation, the company must file Form INC-20A declaring that the subscribed share capital has been received.
This step is mandatory for starting business operations legally.
Failure to comply may lead to penalties or even company closure by the ROC.
POST-INCORPORATION COMPLIANCE CHECKLIST
Once your company is registered, you must meet ongoing legal obligations to stay compliant:
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Appoint a statutory auditor within 30 days of incorporation.
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Hold the first board meeting within 30 days.
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Issue share certificates to shareholders within 60 days.
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Maintain statutory registers and minutes of meetings.
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File annual returns and financial statements on time.
Companies that fail to follow these norms may face penalties and director disqualification.
BENEFITS OF FORMING A PRIVATE LIMITED COMPANY
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Limited Liability – Shareholders are not personally responsible for company debts.
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Ease of Fundraising – Easier to attract investors or venture capital.
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Separate Legal Identity – The company can own assets and enter contracts independently.
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Tax Efficiency – Eligible for various deductions under the Income Tax Act.
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Better Market Credibility – Builds confidence with banks, clients, and vendors.
DOCUMENTS REQUIRED FOR COMPANY REGISTRATION
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PAN and Aadhaar of directors/shareholders.
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Passport (for foreign nationals).
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Utility bill for registered office address.
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NOC from the property owner (if rented).
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Passport-size photos of directors.
Proper documentation ensures smooth and delay-free incorporation.
WHY CHOOSE COMPANY FORMATION INDIA
Registering a company requires legal precision, and Company Formation India simplifies this process with end-to-end support.
Their services cover:
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DSC and DIN application.
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Name search and approval.
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Drafting of incorporation documents.
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ROC and MCA filing.
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Assistance in opening bank accounts.
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Ongoing compliance and post-registration support.
Their professional approach ensures fast approval and full compliance with the Companies Act, 2013.
CONCLUSION
The steps to set up a Pvt Ltd company in India may appear complex, but with the right guidance, it becomes a straightforward process. Registering as a Private Limited Company enhances your business credibility, legal standing, and growth opportunities.
With the expertise of Company Formation India, entrepreneurs can save time, avoid rejections, and focus on growing their business while ensuring 100% compliance with MCA requirements.
FAQs
Q1. How many people are required to start a Pvt Ltd company?
At least two directors and two shareholders are required.
Q2. Can one person register a Pvt Ltd company?
No, but a single individual can register a One Person Company (OPC).
Q3. What is the minimum capital required?
There is no fixed minimum capital; even ₹1 can be the starting capital.
Q4. How long does registration take?
Usually, it takes around 7–10 working days with proper documents.
Q5. Is GST registration mandatory?
Only if annual turnover exceeds ₹40 lakhs (₹20 lakhs for service providers).
Q6. Can foreigners be part of a Pvt Ltd company?
Yes, foreign nationals can be shareholders or directors (with one Indian resident director).
Q7. Why choose Company Formation India?
They offer complete registration and compliance support, ensuring your company is legally established without hassles.
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