Company Registration

WHAT IS PRIVATE LIMITED COMPANY REGISTRATION?

Private Limited Company is the most favored form of business entity in India having perpetual succession with least of two to its shareholders and enables them to offer employee stock options to motivate their employees. Availability through a bank loan, equity or debt funding makes a private limited company the most recommended legal structure of many small and medium-sized business entities that are family-owned or professionally run in India.

REASONS TO OPT FOR A PLC

lIMITED LIABILITY

After establishing a private limited company registration in Mumbai, if debts are not repaid then only the invested capital in commencing the business would be lost, the personal properties of the directors would be safe unlike in a Partnership firm, where partners are personally liable for all their debts and would also have to sell their personal assets. A private limited company has a separate legal identity with restricted liability.

PERPETUAL SUCCESSION

A Private Limited Company is a business entity having perpetual succession that means continued existence until it is legally dissolved or wound up. After getting a PVT LTD company registration, it has a separate legal identity. It is unaffected by the death or removal of any Director. Thus, a Private Limited Company continues to exist irrespective of the changes made in ownership.

EASY TRANSFERABILITY

The ownership in a Private Limited Company can be easily transferred to another person by shares. The signing and filing of the share transfer form and share certificates are sufficient to transfer ownership of the company. The consent of other shareholders is required to affect the share transfers in a private limited company.

BORROWING CAPACITY

After getting a Pvt ltd company registration in Mumbai companies can raise equity funds. With the permission of RBI, it can also issue equity shares, preference shares, debentures and accept deposits. Banks and Financial Institutions prefer providing funding to a company than partnership firms or proprietary concerns. A private limited partnership restricts its ownership but offers legal protection to its shareholders. It is relatively convenient to manage and run the company with a possibility of expansion for growing companies. It is also easier to dissolve and wind up the company.

A private limited partnership offers legal protection to its shareholders but restricts its ownership. It is relatively convenient to manage and run the company with a possibility of expansion for growing companies. Also, it is easy to dissolve and wind up the company.

DOCUMENTS REQUIRED FOR PVT LTD COMPANY REGISTRATION IN MUMBAI

FOR DIRECTORS & SHAREHOLDERS

Copy Of PAN OR Passport (For NRI’S)
Copy Of Voter’s ID OR Passport OR Driver’s License
Copy Of Latest Bank Statement OR Electricity Bill OR Telephone Bill
Passport sized photographs
Specimen Signatures

FOR REGISTERED OFFICE

Copy Of Latest Bank Statement OR Electricity Bill OR Telephone Bill
Copy Of Notarized Agreement of the rent (English)
Copy Of Property owner’s NO-Objection certificate
In case of owned property, Sale deed (English)

PVT LTD COMPANY REGISTRATION PROCEDURE

In order to get a private limited company registration in Mumbai recently, the Ministry of Corporate Affairs (MCA) came with new rules for the Incorporation of a Company under the Companies Act, 2013 by introducing e-form INC-32 under the SPICE scheme in one single step.

*SPICE – Simplified Proforma for Incorporating Company Electronically.

The SPICE form was introduced by MCA with a motive to prepare MOA & AOA electronically (E- MOA or E-AOA). Due to this amendment, the manual preparation of MOA & AOA & physical signature by the concerned persons will not be required.

This form can be used for the following:

Application of DIN (up to 3 Directors)

Application for the availability of Name (Only One)

No need to file a separate form for the first Director (DIR-12), the address of the registered office (INC-22), PAN & TAN.

*E-MOA – Form INC-33

*E-AOA – Form INC-34

DSC of every subscriber is Mandatory. The subscribers & witnesses shall affix their digital signatures to the E-MOA and E-AOA.

The approval of DIN, Name, and Incorporation will usually take 1-2 days.

INC-32 will require Professional Certification.

Also, it is mandatory to file & upload PAN & TAN applications on the MCA website.

Eligibility for Private Limited Company Registration

The following criteria are considered for the eligibility of Pvt Ltd Company Registration,

Number of Directors
For private limited company registration, the company should have a minimum of two directors or shareholders and a maximum of 150 to 200, respectively. One of them must be an Indian citizen.
Authorized Capital
During Pvt Ltd Company Registration, there is no specific requirement for authorized capital. The company is allowed to choose an amount suitable to the business needs.
Name Availability
It should be ensured that the proposed company name is unique and complies with the Ministry of Corporate Affairs guidelines.
Registered Office
While registering for a private limited company, the company must have a registered office address in India for receiving official communications.
Digital Signature Certificates
Also called DSCs, they are necessary for the online filing procedure of the company’s Directors and Shareholders.
Director Identification Number
For Private Limited Company Registration, directors must obtain a Director Identification Number (DIN) from the Ministry of Corporate Affairs.

One Person Company Registration

MEANING

One-person company (OPC) is a new business structure that permits a single entrepreneur to manage a business entity with limited liability.

This concept was introduced to motivate entrepreneurs who are capable of starting a venture on their own by permitting them to create a single person economic entity. It allows a single promoter full control over the company while limiting his liability to contributions to the business. This single promoter will be the only director and shareholder in the company, though there is another director (a nominee director nominated in the MOA and AOA of the company) with no power until the original director becomes incapable of entering into a contract.

There is no equity fundraising or offering employee stock options in an OPC.
It is mandatory for a One Person Company to be converted into a Private Limited Company or Public Limited Company within six months if it has a paid-up capital of over Rs. 50 lakh or crosses an average three-year turnover of over Rs. 2 crores, It must thus, file audited financial statements with the MCA like all Companies. Hence, it is significant to carefully consider the features of a OPC prior to incorporation.

REASONS TO OPT FOR A OPC

SOLE DIRECTOR

One Person Company is the only business venture that can be started, managed and operated by a single director/promoter with limited liability. A corporate form of legal entity ensures that the OPC has simple ownership transferability and perpetual existence.

LIMITED LIABILITY

The directors’ personal assets are always safe irrespective of the debts of the business.

PERPETUAL EXISTENCE

Sole Proprietorships dissolve only with the death of the director. But, OPC being a separate legal entity, would continue to exist due to the nominee director.

CREDIBILITY

OPC must have its books audited annually. The Credibility among vendors and lending institutions is greater because Banks and Financial Institutions prefer providing funding to a company than partnership firms.

SALIENT FEATURES

Annual General Meeting is not required.
Preparation of the cash flow statement is not required.
One board meeting must be conducted in each half of the calendar year with a minimum of 90 days between two board meetings.
OPC can be incorporated as a private limited company only.
Section 98, Sections 100 to 111 (inclusive), shall not apply to a One Person Company and is thus, exempted from the following;
Power of Tribunal to call meetings of members. [Section 98].
Calling of the extraordinary general meeting. [Section 100].
Notice of meeting. [Section 101].
Statement to be annexed to notice. [Section 102].
Quorum for meetings. [Section 103].
Chairman of meetings. [Section 104].
[Section 105].
Restriction on voting rights. [Section 106].
Voting by show of hands. [Section 107].
Voting through electronic means. [Section 108].
Demand for the poll. [Section 109].
Postal ballot. [Section 110].
Circulation of members’ resolution. [Section 111].

CONVERSIONS

A One Person Company can convert itself into a Private Limited Company under two situations;

VOLUNTARY CONVERSION TO PRIVATE LIMITED

A One Person Company when incorporated cannot convert itself to a Private Limited company or Public company from the date of incorporation for a period of not less than two years.

The Conversion process is done as per the rules and regulations laid down under Section 18, and Rule 7(4) of the Companies (Incorporation) Rules, 2014 in the Companies Act, 2013.

COMPULSORY CONVERSION TO PRIVATE LIMITED

A OPC having a paid-up capital equal to or above Rs. 50 lakhs or the Annual turnover exceeds Rs. 2 crore for the concerned financial year, then in such cases, the company has to mandatorily convert into Private Limited Company or Public Limited Company according to the Rule 7(4) of the Companies (Incorporation) Rules, 2014.

DOCUMENTS REQUIRED

FOR THE DIRECTORS

Copy Of PAN OR Passport (For NRIs)
Copy Of Voter’s ID OR Passport OR Driver’s License
Copy Of Latest Bank Statement OR Electricity Bill OR Telephone Bill
Passport sized photographs
Specimen Signatures.

FOR REGISTERED OFFICE

Copy Of PAN OR Passport (For NRIs)
Copy Of Voter’s ID OR Passport OR Driver’s License
Copy Of Latest Bank Statement OR Electricity Bill OR Telephone Bill
Passport sized photographs
Specimen Signatures.

REGISTRATION PROCEDURE

DSC (Digital/E-signature) & DPIN (Director’s PIN) application for filing issued by the MCA.
Chosen name of the company by the director with scanned documents will be used to fill the form INC-32 under SPICE and the Memorandum of Association (MOA) and Articles of Association (AOA). The Certificate of Incorporation will be approved at the end of this process. The Certificate of Incorporation serves as proof of the existence of the company.
Every OPC requires a registered Permanent Account Number (PAN) and Tax Account Number (TAN). PAN and TAN will then be couriered to the registered office address in 21 working days.

Limited Liability Partnership (LLP) Company Registration

WHAT IS LLP COMPANY REGISTRATION?

Limited Liability Partnership (LLP) introduced in 2008 is a prominent legal business structure in India having fewer legal compliances, as the name suggests LLP limits the liability of its partners & lends protection from the incompetence or misdeeds of the other partners. LLP registration is one of the simplest forms of business to incorporate and manage in India.

Also, LLP is less expensive to incorporate and maintain than a Private Limited Company & serves as a better option from a tax perspective.

LLP company registration is preferred by Professionals, Medium and Small businesses due to the simple incorporation procedure and lesser compliance formalities. LLPs are incapable of issuing equity shares, It should thus, not be used for any business that requires raising equity funds during its existence.

REASONS TO OPT FOR LLP

LIMITED LIABILITY

In a Partnership, partners are personally liable for all their debts, if it is not repaid by the business, the partners would have to sell their personal assets. But with an LLP company registration, only the invested capital in commencing the business would be lost, the personal properties of the partners would be safe.

PERPETUAL SUCCESSION

An LLP is a business entity having perpetual succession that means continued existence until it is legally dissolved or wound up. LLP is unaffected by the death or removal of any Partner as it has a separate legal identity. Thus, an LLP continues to exist irrespective of the changes made in ownership.

EASY TRANSFERABILITY

The ownership can be easily transferred to another person by the introduction of a new partner in the LLP registration. Since it is a separate legal entity, changing the Partners, won’t change the ownership of the LLP.

FEWER LEGAL COMPLIANCES

LLP registration in Mumbai is most suitable for startups and small businesses that are commencing their operations and wish to have minimal legal compliance related formalities. It does not require an audit if it has a turnover of less than Rs. 40 lakhs and capital contribution less than Rs.25 lakhs. It thus has fewer structural changes than a private limited company.A private limited partnership offers legal protection to its shareholders but restricts its ownership. It is relatively convenient to manage and run the company with a possibility of expansion for growing companies. Also, it is easy to dissolve and wind up the company.

DOCUMENTS REQUIRED FOR LLP REGISTRATION IN MUMBAI

FOR DIRECTORS & SHAREHOLDERS

Copy Of PAN OR Passport (For NRI’S)
Copy Of Voter’s ID OR Passport OR Driver’s License
Copy Of Latest Bank Statement OR Electricity Bill OR Telephone Bill
Passport sized photographs
Specimen Signatures

FOR REGISTERED OFFICE

Copy Of Latest Bank Statement OR Electricity Bill OR Telephone Bill
Copy Of Notarized Agreement of the rent (English)
Copy Of Property owner’s NO-Objection certificate
In case of owned property, Sale deed (English)

LLP REGISTRATION PROCEDURE

To get LLP registration in Mumbai, DSC (Digital/E-signature) of the partners & DPIN (Designated Partner Identification Number) can be obtained within 5 to 7 days.

Name Approval from any of the maximum six options given by the company to the MCA should ideally be suggestive of the business entity & unique.

Incorporation documents should be submitted to the MCA with an application for incorporation. MCA will then approve the application for incorporation of LLP in 10 to 12 days.

The Certificate of Incorporation shall be accepted at the end of this process.

Every LLP company registration requires a registered Permanent Account Number (PAN) and Tax Account Number (TAN).PAN and TAN will then be couriered to the registered office address in 21 working days.

Establishing a Limited Liability Partnership (LLP) for your business can be a strategic decision. Combining the flexibility of a partnership with the limited liability of a corporation, the LLP business structure has emerged as a compelling route for entrepreneurs, professionals, and small to medium-sized enterprises. A significant merit of limited liabilities partnership to be considered while making this important decision is that LLPs require a minimum of two partners, and there is no maximum limit, which makes them ideal for various business sizes and structures.

At Shah and Doshi, we understand that the decision to form or manage an LLP is a significant one. Our team of experienced chartered accountants specializes in LLP registration and offers a range of services to assist you at every stage, right from LLP formation services to LLP company registration. RMB & Associates , as your chartered accountant, bring a wealth of expertise backed by years of experience that can help you achieve your business aspiration.

With our client-focused approach accompanied by services tailored according to your business requirements, we provide hassle-free LLP registration in Mumbai. RMB & Associates can be your trusted partner in navigating the intricate needs of the business landscape with the following benefits-

End-to-End Services:From LLP formation to ongoing compliance, tax optimization, and strategic planning, we offer a comprehensive suite of services to cater to a wide spectrum of business needs.
Advisory and Consultation:We take the time to understand your business goals and provide solutions that cohesively meet your business requirements.
Tax Efficiency:We specialize in optimizing the tax structure of LLPs, helping you make the most of potential tax benefits while ensuring compliance with tax regulations. By having RMB & Associates by your side, you can stay proactive in your annual filing requirements, changes in LLP law, and related compliance matters.
Conversion and Dissolution:Whether you’re considering converting your existing business structure into an LLP or dealing with the dissolution of an LLP, our experts are here to assist you every step.

Whether you are a professional seeking to collaborate with peers or a business looking for a robust structure considering LLP business structure, we can help you unlock the power of Limited Liability Partnerships (LLPs) for your business. Contact us to get details on our LLP registration service.

Partnership Firm Registration

MEANING

A Partnership Firm is a business structure where two or more persons or an association of people own, manage & operate a business in accordance with the terms and objectives stated in the Partnership Deed. It is thought to have lost its relevance since the introduction of the Limited Liability Partnership (LLP) because in partnership, the partners are liable for the debts of the business due to unlimited liability. However, being inexpensive, the ease of setting up and fewer compliance formalities make it a practical option for some.

A partnership firm is considered ideal for micro and small-scale business which have multiple promoters.

Also, General Partnerships can be either registered or unregistered. Though it is not mandatory to register a Partnership firm, it is preferred to register a Partnership firm due to the added benefits.

REASONS TO OPT FOR A PARTNERSHIP FIRM

EASY TO START

The registration of the partnership firm is not mandatory, hence making it easy to start business as there are no legal formalities involved. However, an unregistered firm will lack certain legal benefits. The Registrar of Firms is responsible for partnership firm registrations.

LESS COMPLIANCE

The appointment of an auditor or if the partnership firm is unregistered, filing annual accounts with the registrar is not required. General Partnerships need not file Income Taxes & depending on its turnover, service and sales tax is also not required. Compliances are much fewer as compared to a LLP.

RELATIVELY INEXPENSIVE

A partnership firm is less inexpensive to start unlike LLP, and even in the long run, due to the lesser compliance requirements, is inexpensive, i.e. an auditor may not be hired. Despite its severe shortcomings (unlimited liability), small businesses may go for it.

ANNUAL FILING NOT NEEDED

A Partnership firm need not file its annual accounts with the Registrar of Companies unlike a LLP or a Company each financial year.

DOCUMENTS REQUIRED

Form No. 1 (Application for registration of the firm under The Indian Partnership Act)
Original copy of Partnership Deed, duly signed by all concerned partners.
Affidavit declaring an intention to become a partner.
Rental or lease agreement of the property on which the business is set up.

IMPORTANT FACTORS TO BE CONSIDERED IN A PARTNERSHIP DEED

The deed should have the names of the partners and their respective addresses, the name of the partnership firm, the date of commencement of operation of the firm, capital invested by each partner, the type of partnership concerned, the profit-sharing ratio, and rules and regulations that need to be followed for intake or removal of partners.

REGISTRATION PROCEDURE

The registration of a partnership firm can be done before its commencement or during its continuance. An application should be filed with the Registrar of Firms of the area in which the concerned business is situated.

Application for partnership registration includes the following:

Name of the firm.
Name of the place where business is carried.
Names of any other place where business is carried on.
Date of partners joining the partnership firm.
Full name and permanent address of partners.
Duration of the firm.

Every partner needs to verify and sign the concerned application.
Ensure that the following documents and prescribed fees are enclosed with the application:

Application for Registration in the prescribed form.
Duly filled Specimen of Affidavit.
Certified copy of the Partnership deed.
Proof of ownership of the place of business or the rental agreement.

Once the Registrar of Firms is satisfied that the application procedure has been duly complied with, it shall record an entry of the statement in the Register of Firms and issue a Certificate of Registration to the partnership firm.

PROPRIETORSHIP FIRM REGISTRATION

MEANING

A sole proprietorship is a very popular type of business entity that is owned and managed by a single entrepreneur particularly in the unorganized sector, mainly small traders and merchants. Proprietorships are recognized by registrations such as service tax registration or sales tax registration. It is very easy to start a proprietorship firm as it has very minimal regulatory compliance formalities for commencing and operating a business.

However, proprietorship firms do not offer benefits such as limited liability proprietorship, separate legal entity, corporate legal status, easy transferability, perpetual succession. Therefore, proprietorship firm registration is best suited only for micro and small businesses that may not have a continuous existence.

Since, the existence of a proprietorship firm must be established through tax other business registrations as per the rules and regulations. Registration is thus, obtained in the name of the Proprietor to establish that the concerned Proprietor is managing and operating the business as a sole proprietor. Hence, all the registrations would be in the name of the Proprietor, making him personally liable for all the liabilities of the firm.

REASONS TO OPT FOR A PROPRIETORSHIP FIRM

EASY TO START

A Proprietorship firm needs minimal registration formalities. Therefore, it is easy to set up. However, it gets relatively tougher to open a bank account or obtain a payment gateway in the business name; since registrations like Service Tax or VAT or GST Registration is required.

FEWER COMPLIANCES

Sole Proprietorships are recognized through their tax registrations, thus, the extent of their compliance is only limited to the annual filing of their service, professional or sales taxes.

REDUCED COSTS

Compared to OPC, a sole proprietorship firm is relatively inexpensive, thanks to the minimal compliance formalities; it is inexpensive even in the long run. Despite its severe shortcomings like the unlimited liability, small businessmen, merchants and traders opt for it.

LOWER TAXES

A proprietorship firm with less than Rs. 3 lakhs of income do not to pay any income tax, as proprietorship’s are taxed as the individuals owing the business. However, a proprietorship cannot benefit some of the tax deductions, which would potentially raise the tax liability.

SINGLE PROMOTER

A proprietorship firm is registered, managed and operated by a single person and is hence, preferred by micro and small businesses.

EASY TO WIND UP

The Proprietor and the proprietorship firm are the same for all the concerned legal purposes. Hence, winding up or closing a proprietorship is simple having fewer formalities. In most cases, to wind up a proprietorship firm, only the tax registrations acquired in the name of the proprietor must be cancelled.

DOCUMENTS REQUIRED

Address proof and identity proof (PAN card).
KYC documents.
Rental agreement or sale deed.

IMPORTANT FACTORS TO BE CONSIDERED IN A PARTNERSHIP DEED

Prepare documents required for the Proprietorship Registration.
Apply for the Service Tax or VAT or GST registration.
Get Service tax or VAT or GST Registration Certificate.
Apply for a current bank account in any bank with complete documentation.
After getting the respective licenses or certificates as per the proprietorship business, one can commence the business.

NPO REGISTRATION (UNDER BPT ACT)

Eligibility for Private Limited Company Registration

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