FAQ – Frequently Asked Questions about Limited Company Registration in India
1. What is a Limited Company?
A Limited Company, also known as a private limited company, is a legal entity that can be formed by individuals or businesses to conduct commercial activities. It offers limited liability protection to its shareholders, safeguarding their personal assets in case of any financial liabilities.
2. How does one register a Limited Company in India?
To register a Limited Company in India, the following steps must be followed:
a) Obtain a Digital Signature Certificate (DSC) for the directors and shareholders.
b) Obtain a Director Identification Number (DIN) for the directors.
c) Apply for the availability of the desired company name through the Ministry of Corporate Affairs (MCA) portal.
d) Prepare the necessary documents such as Memorandum of Association (MOA) and Articles of Association (AOA).
e) File the incorporation documents, along with the prescribed fees and forms, with the Registrar of Companies (ROC).
f) Obtain the Certificate of Incorporation from the ROC, confirming the formation of the Limited Company.
3. Can foreign nationals form a Limited Company in India?
Yes, foreign nationals are allowed to form a Limited Company in India. However, it is advisable to seek professional guidance to understand the specific requirements and legalities involved.
4. How many directors are required to form a Limited Company?
A minimum of two directors is required to form a Limited Company in India. However, one of the directors must be an Indian resident.
5. What is the minimum capital requirement for a Limited Company?
There is no minimum capital requirement for a Limited Company in India. The capital can be as low as Rs. 1 or can be any amount decided by the shareholders.
6. What are the compliance requirements for a Limited Company?
A Limited Company in India must comply with various statutory provisions, including filing annual financial statements, conducting annual general meetings, maintaining proper books of accounts, and filing income tax returns. Non-compliance may result in penalties or legal action, so it is crucial to stay updated and fulfill these obligations.
7. Can a Limited Company be converted into another type of business entity?
Yes, a Limited Company can be converted into another type of business entity, such as a partnership or a sole proprietorship. However, it requires following certain legal processes and obtaining necessary approvals from the concerned authorities.
8. Can a Limited Company have more than one office in India?
Yes, a Limited Company can have multiple offices within and outside India. Each office must be registered separately as per the applicable laws and fulfill the requisite compliance requirements.
9. What are the advantages of registering a Limited Company?
Some key advantages of registering a Limited Company in India are limited liability protection, separate legal entity status, ease of raising funds, transferable ownership, perpetual existence, and better credibility in the eyes of stakeholders.
10. How long does it take to register a Limited Company in India?
The time required for the registration of a Limited Company in India can vary based on various factors such as the completeness of documents submitted, government approvals, and workload of the concerned authorities. On average, the process may take around 10-15 days, subject to any unforeseen delays.