A Private Limited Company in Sikkim is a business entity that is owned by a relatively small number of shareholders or members, who may be non-governmental organizations, individuals or a combination of both. Unlike a public company, a private company's stocks are not listed on the stock exchange and are typically owned and exchanged by a limited group of people.

In India, the formation and functioning of Private Limited Companies are governed by Section 7 of the Companies Act, 2013, along with The Companies (Incorporation) Rules, 2014. According to the Companies Act, 2013, a Private Limited Company in Sikkim is defined as a company that has a minimum paid-up share capital as prescribed by law and whose articles:

(i) Restrict the right to transfer its shares;

(ii) Except in the case of One Person Company, limits the number of its members to two hundred;

(iii) Prohibits any invitation to the public to subscribe for any securities of the company.

However, for the purpose of calculating the total number of members in the company, two or more persons holding one or more shares in the company jointly are considered a single member. Additionally, employees and former employees who continue to be members after the termination of their employment are also excluded from the total number of members.

At Instabiz Filing, we provide private limited company registration services that ensure compliance with all the relevant legal requirements, allowing businesses to operate smoothly and efficiently. Our team of experienced professionals will guide you through the entire process, from name registration to obtaining the necessary licenses and permits. Contact us today to get started on forming your Private Limited Company in Sikkim.

Company Limited by Shares: The nominal share value specified in the Memorandum of Association serves as the members' liability cap in these corporations. A shareholder cannot be made accountable for more than the value of the shares they purchased from the corporation.

Company Limited by Guarantee: The amount of liability that each member assumes in the Memorandum of Association governs the members' liability in a private limited company limited by guarantee. As a result, a Private Limited Company in Sikkim Limited by Guarantee's members are only responsible for the amount of guarantee they provided in the Association Memorandum.

Additionally, in a corporation limited by guarantee, the shareholder's guarantee may only be requested in the event of a corporate wind-up. When a Company Limited by Guarantee is still operating, the members' guarantee cannot be revoked.

Limited Liability

The Company exists as a separate legal entity as from its members. The liability of the corporate is completely different from its members of a corporation. Liability for repayment of debts and lawsuits incurred by the corporate, lies on it and not the owner.

Easy Transferable Ownership

The shares and alternative interest of any member within the Company shall tend to be a movable property and may be transferable within the manner therefore provided by the Articles of such company. Therefore, it's easier to subscribe or leave the membership of the corporate, conjointly it's easier to transfer the possession.

Raising Funds

Raising funds as a small business and a sole proprietorship or partnership can be difficult. But as per Companies Act 2013 a company can sell shares to the public or can accept deposits from the public and can therefore raise money easier than other business structure types. The modes of financing business carried on by the company are numerous. Moreover, since the companies are governed by particular law and have to comply with stringent disclosure norms, therefore they enjoy good credit worthiness with various financial institutions.

Disadvantages of Company:

Increased Legal Compliance & Administration Costs

Private limited companies in Sikkim must submit its annual returns, financial statements, Board reports etc to the Registrar of Companies annually. Every private limited must get its accounts audited by a practicing Chartered Accountant, which makes it mandatory to appoint a chartered accountant as auditor of the company; even there is no significant accounting transaction. Further there are many event based compliance requirements too. So in order to meet legal obligations casted on private limited companies by the Companies Act, 2013 and others statues, a company must have a competent professional by its side to advise and help in ensuring statutory compliances, which increases the general and administrative expenses of a business. 

Restricted Access to Capital Markets

Private Limited Corporation in Sikkim cannot get its shares listed in any stock market through initial public offerings. With this restriction, private limited corporations in Sikkim might notice it troublesome to attract outside investors to buy the shares.

Public Disclosure of Company Information

A Private Limited Corporation in Sikkim should file its Annual Returns, financial Statements, Auditor’s reports, Board’s Report etc to the Registrar of Companies, that become a public document once filed with Registrar of companies and will be inspected by general public as well as competitors by paying some fees to the Registrar of Companies. Data revealing will create an entity competitively underprivileged. Competitors – especially those not required to disclose any documents – will access that data and use it to enhance their own business.

Limited Liability

The Company exists as a separate legal entity as from its members. The liability of the corporate is completely different from its members of a corporation. Liability for repayment of debts and lawsuits incurred by the corporate, lies on it and not the owner.

Easy Transferable Ownership

The shares and alternative interest of any member within the Company shall tend to be a movable property and may be transferable within the manner therefore provided by the Articles of such company. Therefore, it's easier to subscribe or leave the membership of the corporate, conjointly it's easier to transfer the possession.

Raising Funds

Raising funds as a small business and a sole proprietorship or partnership can be difficult. But as per Companies Act 2013 a company can sell shares to the public or can accept deposits from the public and can therefore raise money easier than other business structure types. The modes of financing business carried on by the company are numerous. Moreover, since the companies are governed by particular law and have to comply with stringent disclosure norms, therefore they enjoy good credit worthiness with various financial institutions.

Disadvantages of Company:

Increased Legal Compliance & Administration Costs

Private limited companies in Sikkim must submit its annual returns, financial statements, Board reports etc to the Registrar of Companies annually. Every private limited must get its accounts audited by a practicing Chartered Accountant, which makes it mandatory to appoint a chartered accountant as auditor of the company; even there is no significant accounting transaction. Further there are many event based compliance requirements too. So in order to meet legal obligations casted on private limited companies by the Companies Act, 2013 and others statues, a company must have a competent professional by its side to advise and help in ensuring statutory compliances, which increases the general and administrative expenses of a business. 

Restricted Access to Capital Markets

Private Limited Corporation in Sikkim cannot get its shares listed in any stock market through initial public offerings. With this restriction, private limited corporations in Sikkim might notice it troublesome to attract outside investors to buy the shares.

Public Disclosure of Company Information

A Private Limited Corporation in Sikkim should file its Annual Returns, financial Statements, Auditor’s reports, Board’s Report etc to the Registrar of Companies, that become a public document once filed with Registrar of companies and will be inspected by general public as well as competitors by paying some fees to the Registrar of Companies. Data revealing will create an entity competitively underprivileged. Competitors – especially those not required to disclose any documents – will access that data and use it to enhance their own business.

The process for registering a company in Sikkim involves the following steps:

Step 1: Approval of Company Name

An application for approval of the company name must be submitted to the Ministry of Corporate Affairs. The application can include 1 or 2 proposed names with business objectives. If the proposed name is rejected, 1 or 2 more names can be submitted. The MCA typically approves all name approval applications within 5 working days.

Step 2: Obtain Digital Signature for Directors

In India, wet signatures are not allowed for filings with the MCA. Hence, a digital signature is required for all filings. The Directors must obtain a digital signature that is issued by an authorized Certifying Authority in India. The process for obtaining a digital signature involves submitting a copy of the Director's identity proof and completing a video KYC process. For foreign nationals, the passport and other documents must be apostilled by a local embassy.

Step 3: Submit Incorporation Application

Once the digital signatures are obtained, the incorporation application can be filed in SPICe Form to the MCA with all necessary attachments. The Memorandum of Association (MOA) and Articles of Association (AOA) must also be filed. If the MCA finds the application to be complete and acceptable, the Incorporation Certificate is granted along with the PAN of the company. The MCA usually approves all incorporation applications within 5 working days.

At each stage of the process, our team of experts is ready to assist you and answer any questions you may have. With our support, your company formation journey will be smooth, stress-free, and a step towards realizing your vision.

To register a private limited company in Sikkim, proposed directors must provide identification and proof of address documents.

• For Indian nationals, a PAN card is mandatory, while foreign nationals must present a passport.

• A document with the director's address must also be submitted, which could be a passport, driver's license, election ID, ration card, or Aadhar ID for Indian nationals, and a driver's license, bank statement, or residence card for foreign nationals.

• Proof of residency must be established with a bank statement, electricity bill, or phone bill generated within the last two months for both Indian and foreign nationals.

• If a company based in India or abroad is a shareholder, a board resolution authorizing investment, incorporation certificate, and address proof of the company must be submitted.

• Meeting all these requirements will ensure a smooth and efficient company registration process in Sikkim.

Instabiz Filings appreciates your cooperation and looks forward to helping you establish a successful private limited company in Sikkim.

Note: The above pointers are applicable for pvt ltd company registration in Sikkim. For Limited Liability Partnership registration, the document requirements may vary.

Our firm has a skilled team of Chartered Accountants, Company Secretaries, and Lawyers, as well as on-call support to handle all your financial, legal, and company formation needs.

• Each client is assigned a dedicated relationship manager to guide them through the process and ensure a seamless and stress-free experience.

• Our company formation & registration  process is fully online, hassle-free, and designed for a quick turnaround time.

• We offer affordable pricing options to make our services accessible to businesses of all sizes.

• Instabiz Filing has served thousands of happy customers, and our clients' satisfaction is our top priority.

• We offer exclusive offers such as No Cost EMI and referral discounts as a way to express our gratitude to our valued customers.

• Our commitment is to provide comprehensive, hassle-free, and affordable solutions to our clients' financial, legal, and company formation needs, so they can focus on growing and succeeding in their businesses.