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Frequently Asked Questions (FAQs) – Private Limited Company
1. What is a Private Limited Company?
A Private Limited Company is a business entity registered under the Companies Act, 2013, where the liability of shareholders is limited to their shareholding. It has a separate legal identity, allowing it to own assets, enter contracts, and raise funds independently.
2. Who can start a Private Limited Company in India?
Any Indian citizen, resident, non-resident Indian (NRI), or foreign national can start a Private Limited Company in India, subject to compliance with FDI and FEMA regulations.
3. What is the minimum number of directors and shareholders required?
A Private Limited Company requires:
- Minimum 2 directors
- Minimum 2 shareholders
The same individuals can act as both directors and shareholders.
4. Is there any minimum capital requirement?
No, there is no minimum paid-up capital requirement to register a Private Limited Company in India.
5. How long does it take to register a Private Limited Company?
The registration process typically takes 7 to 10 working days, subject to document verification and name approval by the Ministry of Corporate Affairs (MCA).
6. What documents are required for Private Limited Company registration?
Commonly required documents include:
- PAN card of directors and shareholders
- Aadhaar / Passport
- Address proof (utility bill or bank statement)
- Passport-size photographs
- Registered office proof (rent agreement or ownership documents)
7. Can a Private Limited Company have a registered office at a residential address?
Yes, a Private Limited Company can be registered at a residential address, provided valid address proof and a No Objection Certificate (NOC) are submitted.
8. What are the benefits of a Private Limited Company?
Key benefits include:
- Limited liability protection
- Separate legal entity
- Easy access to funding and investors
- Higher business credibility
- Perpetual succession
9. Is GST registration mandatory for a Private Limited Company?
GST registration is mandatory only if the company crosses the prescribed turnover threshold or is involved in interstate supply or specified services.
10. Can a Private Limited Company raise funds from investors?
Yes, Private Limited Companies can raise funds through:
- Angel investors
- Venture capital
- Private equity
- Rights issue and private placement
11. What are the annual compliance requirements?
A Private Limited Company must comply with:
- Annual ROC filings
- Financial statements and audit
- Income tax return filing
- Board meetings and AGM
12. Can a Private Limited Company be converted into another entity?
Yes, a Private Limited Company can be converted into:
- Public Limited Company
- LLP (subject to conditions)
13. Is audit mandatory for a Private Limited Company?
Yes, statutory audit is mandatory, irrespective of turnover or profit.
14. Can foreign directors be appointed in a Private Limited Company?
Yes, foreign nationals can be appointed as directors, subject to DIN, DSC, and FEMA compliance.
15. Why should I choose Private Limited Company over LLP?
A Private Limited Company is preferred when:
- External funding is required
- Business scalability is planned
- Investor confidence is critical
16. What happens if compliance requirements are not met?
Non-compliance may result in:
- Monetary penalties
- Director disqualification
- Legal action by MCA
17. How can a Private Limited Company be closed?
A Private Limited Company can be closed through:
- Voluntary strike-off
- Winding up under Companies Act
18. Is Startup India registration available for Private Limited Companies?
Yes, Private Limited Companies are eligible for Startup India (DPIIT) recognition, subject to eligibility criteria.
19. Can a Private Limited Company open a current bank account?
Yes, once incorporated, the company can open a current account in any Indian bank using the Certificate of Incorporation and PAN.
20. Why choose professional consultancy for Private Limited Company registration?
Professional assistance ensures:
- Error-free documentation
- Faster incorporation
- Compliance with legal requirements
- Post-incorporation support
