Send an Enquiry
A Private Limited Company is a form of business organization which is privately owned by a few people. It restricts the transfer of shares and cannot invite the public to subscribe to its securities.
In simple terms, it is a legally recognized business entity that separates the company’s finances from its owners, providing a structured and trustworthy framework for operations and growth.
Definition (As per Companies Act, 2013)
Under Section 2 (68) of the Companies Act, 2013:
A Private Company refers to a company that has a minimum paid-up share capital as may be prescribed and which by its articles.
(a) imposes limitations on the right to transfer its shares; and
(b) restricts its membership to two hundred persons.
Governing Law: Companies Act, 2013
Regulatory Authority: Ministry of Corporate Affairs (MCA)
Registration Portal: www.mca.gov.in
Form Used for Incorporation: SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus)
The process has become completely online, ensuring faster registration, integration with PAN, TAN, GST, ESIC, and bank account setup.
| Feature | Description |
|---|---|
| Minimum Members | 2 Shareholders |
| Maximum Members | 200 Shareholders |
| Minimum Directors | 2 Directors |
| Maximum Directors | 15 (can increase with special resolution) |
| Limited Liability | The liability of the shareholders is limited to the unpaid share capital. |
| Separate Legal Entity | It is a company that exists apart of the members. |
| Perpetual Succession | The changes in membership do not affect the continuation of the company. |
| Name Requirement | Must end with “Private Limited” |
| Share Transfer | Restricted as per Articles of Association |
| Minimum Capital Requirement | No minimum paid-up capital (as per 2025 norms) |
| Annual Compliance | Mandatory ROC filings, ITR, Board Meetings, etc. |
While it offers many benefits, some limitations include:
Higher compliance requirements compared to proprietorship or partnership firms
Mandatory annual audits and ROC filings
Restrictions on share transfer
Slightly higher registration and maintenance costs
| Requirement | Details |
|---|---|
| Directors | Minimum 2 directors (at least one must be an Indian resident) |
| Shareholders | Minimum 2 and maximum 200 |
| Digital Signature Certificate (DSC) | Compulsory to every director and subscriber |
| Director Identification Number (DIN) | Mandatory for directors |
| Registered Office | Must have an official business address in India |
| Company Name | Must be unique and end with “Private Limited” |
| Capital Requirement | No minimum paid-up capital prescribed |
| Documents Required | ID proof, address proof, PAN, photographs, utility bill for address, NOC from property owner |
Obtain Digital Signature Certificate (DSC) : All proposed directors and shareholders must have a DSC to sign electronic documents.
Apply for Director Identification Number (DIN) : Directors must have a valid DIN, applied through SPICe+ form.
Name Approval through SPICe+ Part A : Submit two name options for approval under the RUN service or directly through SPICe+ Part A.
Drafting of Incorporation Documents : Get ready Memorandum of Association (MOA), Articles of Association (AOA) and declarations.
Filing SPICe+ Part B and Linked Forms : Upload company details, registered address, directors, and capital information.
Filing AGILE-PRO-S Form : For automatic registration of GST, EPFO, ESIC, Professional Tax (if applicable), and bank account.
Verification by MCA : The Registrar of Companies (ROC) reviews the application and documents.
Issuance of Certificate of Incorporation (COI) : Once approved, the ROC issues a COI with the Corporate Identity Number (CIN), officially establishing the company.
After registration, the company must comply with:
Opening a current bank account in the company’s name
Issuing share certificates within 60 days
Filing INC-20A (Declaration for Commencement of Business)
Conducting first board meeting within 30 days
Appointing statutory auditor
Filing annual returns – AOC-4 (financial statements) and MGT-7/MGT-7A (annual return)
Filing income tax returns every financial year
| Parameter | Private Limited Company | Limited Liability Partnership (LLP) | One Person Company (OPC) |
|---|---|---|---|
| Legal Status | Separate Legal Entity | Separate Legal Entity | Separate Legal Entity |
| Members Required | Min 2, Max 200 | Min 2 Partners | Only 1 Member |
| Liability | Limited | Limited | Limited |
| Tax Rate (2025) | 22% (for domestic companies) | 30% | 22% |
| Funding Options | High (investors prefer) | Limited | Limited |
| Compliance Level | High | Moderate | Low |
| Ideal For | Startups, SMEs, Businesses with growth plans | Professional Firms | Solo Entrepreneurs |
Recognized globally as a credible business structure
Simplified MCA process through SPICe+
Integration with Startup India and DPIIT registration benefits
Easier to convert into a Public Limited Company when scaling up
Perfect structure for investors, technology startups, and service companies
XYZ Innovations Private Limited
Incorporated in 2025 by two co-founders, the company develops AI solutions for businesses.
Both founders hold equal shares, and their liability is limited to the amount of their shareholding. Even if the company faces a financial setback, their personal assets remain secure.
A Private Limited Company (Pvt Ltd Company) is a legally registered business entity under the Companies Act, 2013 that offers limited liability to its shareholders and has a separate legal identity. It’s one of the most trusted business structures in India, ideal for startups and growing businesses.
Key features include:
Minimum 2 and maximum 200 shareholders
Separate legal identity
Limited liability protection
Perpetual succession
Restriction on public share transfer
Mandatory use of “Private Limited” in the company name
At least two directors are required to incorporate a Private Limited Company, and at least one director must be an Indian resident.
As per MCA rules (2025), there is no minimum paid-up capital requirement. You can start a company with any amount of capital.
Any Indian citizen, NRI, or foreign national can register a Private Limited Company, provided at least one director is a resident of India (staying for 182+ days in the previous calendar year).
You’ll need the following:
PAN Card of all directors and shareholders
Aadhaar / Passport / Voter ID for address proof
Passport-size photographs
Proof of registered office (rent agreement or property papers)
Latest utility bill (not older than 2 months)
NOC from property owner (if rented premises)
With MCA’s SPICe+ form (2025), the process takes around 5 to 7 working days, subject to name approval and document verification.
The cost varies depending on authorized capital and professional charges. Typically, it ranges between ₹6,000 to ₹15,000, including government fees, PAN, TAN, and professional support.
Yes. Foreign nationals, NRIs, and foreign entities can become shareholders or directors in a Private Limited Company, subject to FDI (Foreign Direct Investment) guidelines.
Mandatory annual compliances include:
AOC-4 – Filing of financial statements
MGT-7/MGT-7A – Annual return
Income Tax Return filing
Statutory audit by a Chartered Accountant
Conducting board meetings and maintaining minutes
AOC-4: Within 30 days of AGM
MGT-7/MGT-7A: Within 60 days of AGM
(Usually by 30th October and 29th November respectively for companies closing their financial year on 31st March.)
Yes. Every Private Limited Company must get its accounts audited annually by a Chartered Accountant, irrespective of turnover or profit.
Yes. A Private Limited Company can be converted into an LLP, Public Limited Company, or One Person Company (OPC) by following the prescribed ROC procedures and approvals.
For domestic companies:
Base Tax Rate: 22% (under Section 115BAA)
Concessional Rate for New Manufacturing Companies: 15% (under Section 115BAB)
Plus: 10% surcharge (if income > ₹1 crore) and 4% health & education cess
Yes. A Private Limited Company, being a separate legal entity, can buy, sell, or lease property in its own name.
The company must file the following with the Registrar of Companies (ROC):
Form AOC-4 (Balance Sheet & Profit and Loss Account)
Form MGT-7 or MGT-7A (Annual Return)
Form ADT-1 (Auditor Appointment)
Yes, a salaried person can become a director or shareholder, provided their employment agreement doesn’t restrict them from engaging in other business activities.
Yes. Every company must obtain a PAN from the Income Tax Department and open a current account in the company’s name.
Because it offers:
Limited liability protection
Higher business credibility
Easier fundraising options
Perpetual succession
Global recognition and scalability
It’s the best structure for startups and entrepreneurs aiming for growth, stability, and investor trust in 2025.
