Incorporation of Private Limited Company

January 16, 2025 by Team Instabizfilings

Overview (What & Why)

A Private Limited Company (Pvt. Ltd.) is a separate legal entity formed under the Companies Act, 2013. It offers limited liability to shareholders, perpetual succession, investor credibility and easier access to institutional capital making it the most popular vehicle for startups and SMEs in India.

Key modern advantage (2025): incorporation is now largely digital and integrated via SPICe+ (SPICe Plus) which allows name reservation, DIN allotment, PAN/TAN issuance and various linked registrations (GSTIN/EPFO/ESIC/bank account) in a single submission.

Legal framework & governing authority

Primary law: Companies Act, 2013 (and rules thereunder).
Regulator: Ministry of Corporate Affairs (MCA).
Portal & form: MCA online portal SPICe+ (Part A for name; Part B + linked forms for incorporation, DIN, PAN, TAN, AGILE-PRO-S etc.).

Who can incorporate a Private Limited Company?

Minimum 2 shareholders and 2 directors (one director must be an Indian resident stayed in India ≥182 days in previous FY).
Maximum of 200 members.
Indian nationals, NRIs and foreign nationals/entities can be shareholders/directors (subject to FDI rules and additional KYC/identification).

High-level incorporation flow (step-by-step)

Decide structure & name strategy : Prepare 2–3 name options (avoid trademark conflicts and restricted words). Use RUN service or SPICe+ Part A for reservation. Name reservation validity: normally 20 days (check latest MCA notice for exact validity).
Get Digital Signature Certificates (DSC) : Class-3 DSCs for all proposed directors / subscribers who will sign electronic forms. Obtain from any CCA-licensed Certifying Authority. (Do DSC early — it’s required to sign SPICe+.)
Prepare KYC & documents : Collect identity & address proofs, photographs, office proof, NOC (if premises rented), and board resolution template (if required). See detailed documents list below.
Fill SPICe+ Part A (Name) optional simultaneous filing : Either reserve name first (Part A) → then file Part B, or file Part A & Part B simultaneously if confident name complies.
Fill SPICe+ Part B + linked forms : Part B contains incorporation details (capital, subscribers, directors, registered office).
Linked forms include:

e-MOA (INC-33) and e-AOA (INC-34) (electronic MOA & AOA),
AGILE-PRO-S (INC-35) — for PAN, TAN, EPFO, ESIC, Profession Tax (if applicable), optional GSTIN & bank account opening,
DIN allotment (if directors do not have DIN).

Sign & upload documents; pay fees & stamp duty : Attach subscriber signatures, identity/address proofs, office proof, MOA/AOA. Pay ROC filing fee (depends on authorised capital) and applicable stamp duty (state-dependent). Ensure consistency in names, addresses and PAN/Aadhaar across documents.
ROC review → Certificate of Incorporation (COI) : ROC examines: if all is good, issues Certificate of Incorporation (COI) with the CIN. PAN & TAN are typically generated and provided as part of the linked AGILE/Part B workflow (where selected).

Detailed documents checklist

For each promoter / director / subscriber:

PAN Card (mandatory for Indian nationals) / Passport (for foreign nationals).
Aadhar Card (where applicable), or other address proof (Voter ID, Driving Licence, Passport).
Recent passport-size photograph.
Proof of residential address (utility bill / bank statement not older than 2 months).

For registered office:

Rent agreement + NOC from owner (if rented) OR ownership proof (sale deed) + latest utility bill. Some ROCs may ask for photographs of the office during compliance checks.

Company documents:

e-MOA (INC-33) and e-AOA (INC-34) (drafted electronically).
Incorporation affidavit / consent to act as director (INC-9 or auto-generated declaration).
Board resolution / authorization & Power of Attorney (if an agent files).

State stamp duty & fees what to budget for (indicative)

Government/ROC fees: depend on authorised capital slab refer MCA fee table at filing time.
Stamp duty: charged on MOA/AOA varies significantly by state (small in some states, higher in metros). Check the state revenue portal.
Professional fees: for CA/CS/firm handling incorporation (₹5,000–₹25,000 typical depending on service scope).
DSC cost: approx ₹800–₹1,500 per DSC (varies).
AGILE/Linked services: no extra govt fee for PAN/TAN but professional service may charge.

Typical timeline (if documents are perfect)

DSC issuance: 1–2 working days (if Aadhar eKYC available).
Name reservation: 1–3 working days (can be immediate if filed properly).
SPICe+ submission → COI issuance: commonly within 3–10 working days, but may extend depending on ROC workload and clarifications. Total: ~5–15 working days typical.

Post-incorporation (first 30–180 days) mandatory actions

Open bank account in company name (AGILE can help pre-populate bank opening documentation).
First Board Meeting within 30 days of incorporation.
Issue Share Certificates to subscribers (within 60 days).
Appoint Statutory Auditor within 30 days (file ADT-1).
File INC-20A (Declaration for Commencement of Business) — if not required by MCA changes, ensure any required declaration is filed within statutory timeline (usually 180 days).
Register for GST / EPFO / ESIC if applicable (AGILE-PRO-S can trigger these).

Common pitfalls & how to avoid them

Mismatch in documents: Names, PAN, DOB, addresses must match exactly across all KYC and SPICe+ entries — else rejection.
Weak name search: Not checking trademarks/domain availability leads to later objections. Do a trademark and web domain search before finalizing the name.
Incomplete office proof / NOC: Use up-to-date utility bills and proper NOC to avoid ROC queries.
Delayed DSC procurement: Procure DSCs early (they’re required to sign forms).

Practical tips (conversion & scaling in future)

Draft MOA/AOA with an eye on future fundraising and ESOPs avoid restrictive clauses that block issuance of shares or investor rights.
Keep authorised capital modest initially (reduce stamp duty) and increase later via simple procedures.
If planning foreign directors/shareholders, prepare passport + KYC attestation early to avoid delays.

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