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What is Private Limited Company?

A Private Limited Company is a popular choice for small to medium-sized businesses in India due to its limited liability protection, ease of management, and regulatory framework that supports growth and sustainability.

Establishing a business in India frequently leads entrepreneurs to opt for a private limited company structure. This model provides shareholders with limited liability protection while imposing certain ownership restrictions. In contrast, a Limited Liability Partnership (LLP) allows partners to manage the business directly. Registering a private limited company creates a clear separation between directors and shareholders, enhancing governance and operational clarity.

At eTaxCart, we provide an affordable and efficient service for registering new companies and startups in India. Our team ensures a smooth and hassle-free private limited company registration process, taking care of all legal requirements and ensuring full compliance with the regulations set forth by the Ministry of Corporate Affairs (MCA). Let us help you navigate the complexities of online private limited company registration in India.

To register a private limited company in India, the following criteria must be met:

  • Minimum of 2 Directors and 2 Shareholders are required.
  • At least one director must be an Indian resident and Indian citizen.
  • The registered office of the company must be located in India.
  • Directors can also hold shares in the company.

Advantages of Private Limited Company

At eTaxCart, our mission is to make tax and compliance stress-free — so you can focus on growing your career, your business, or your next big idea.

Limited liability protection for shareholders

Shareholders in a private limited company are only liable for the amount they have invested in the company. This protects their personal assets in case the company faces financial difficulties or legal claims.

Separate legal entity

A private limited company is a separate legal entity from its owners. This means the company can own property, enter into contracts, and incur debts in its own name, providing clarity in terms of responsibilities and liabilities.

Easier capital raising through share issuance

Raising capital becomes more straightforward through the issuance of shares to investors. It enables the company to access funding from both internal and external sources, fueling its growth and expansion opportunities.

Continuity of existence

A private limited company continues to exist even if the shareholders or directors change. This offers stability and continuity for operations, as it is not affected by the death or exit of key personnel.

Enhanced credibility and trust

Operating as a private limited company adds credibility to your business. It reassures investors, clients, and partners that the company is legally structured and compliant with regulatory standards, enhancing trust in your operations.

Potential tax benefits

Private limited companies may enjoy certain tax advantages, such as lower corporate tax rates, tax deductions on business expenses, and opportunities for tax deferrals. This can lead to greater profitability for the company.

Management flexibility with a clear distinction between ownership and management

In a private limited company, the ownership and management are distinct. This structure allows for flexibility in management decisions while enabling owners to focus on business strategy and long-term growth.

Disadvantages of Private Limited Company

At eTaxCart, our mission is to make tax and compliance stress-free — so you can focus on growing your career, your business, or your next big idea.

Strict regulatory compliance requirements

Private limited companies are required to adhere to stringent regulations, including filing annual financial statements, holding regular meetings, and maintaining corporate records. This can be time-consuming and costly.

Restricted ownership transfer

Shareholders in a private limited company face restrictions when transferring ownership. This ensures control remains within a specific group but may limit opportunities for growth or sale to external parties.

Higher costs of incorporation and compliance

The process of setting up a private limited company involves higher legal and administrative costs compared to other business structures. Additionally, ongoing compliance and reporting requirements can be expensive and burdensome.

Maximum limit of 200 members

Private limited companies can have no more than 200 members, which may limit the ability to grow the ownership base or attract large numbers of investors in certain cases.

Less privacy due to public disclosure of information

Certain business details, such as financial reports and director information, must be disclosed publicly. This reduces the level of privacy compared to other business structures like sole proprietorships or partnerships.

Restrictions on certain business activities

Some industries or business activities are subject to additional restrictions or regulations, which may limit the scope of operations for a private limited company in specific sectors or regions.

Increased complexity in management and governance

The need for formal management structures, such as boards of directors and annual general meetings, adds complexity. Decision-making can also be slower due to the need for board approvals and adherence to corporate governance practices.

Key Features of Private Limited Company

Here are the key features of a Private Limited Company in India

  • Limited Liability

    Shareholders of a private limited company have limited liability, meaning their personal assets are protected from the company's debts. They are only liable to the extent of their unpaid shares.

  • Minimum and Maximum Number of Members

    A private limited company must have a minimum of two members and can have a maximum of 200 members (excluding employees).

  • Restrictions on Share Transfer

    The transfer of shares in a private limited company is restricted. This means that shares cannot be freely sold or transferred without the consent of other shareholders.

  • No Public Subscription

    A private limited company cannot invite the public to subscribe to its shares or debentures. This restriction helps maintain the private nature of the company.

  • Separate Legal Entity

    A private limited company is considered a separate legal entity from its owners. It can own property, enter into contracts, and sue or be sued in its own name.

  • Directors

    A private limited company must have a minimum of two directors, and there is no maximum limit on the number of directors. At least one director must be a resident of India.

  • Compliance Requirements

    Private limited companies are required to comply with various regulatory requirements, including filing annual returns, maintaining statutory registers, and conducting annual general meetings.

  • Tax Benefits

    Private limited companies may enjoy certain tax benefits and incentives under various government schemes, making them an attractive option for entrepreneurs.

  • Fund Raising

    In India, a company is the best option for raising funds from venture capitalist or angle investors.

  • FDI Allowed

    In a Private Limited Company, 100% Foreign Direct Investment (FDI) is permitted, allowing any foreign entity or individual to invest directly in the company.

Required Documents for Private Limited Company Registration

To ensure a seamless and efficient registration process for a Private Limited Company, the following documents are essential. These documents are organized based on the requirements for directors and the registered address of the company.

For the Directors

View the documents required for the directors.

PAN Card: A clear and valid copy of the PAN Card is necessary.
Passport Size Photograph: One recent passport-sized photo is required.
Identity Verification:
For Indian Promoters: A copy of either a Driving License, Voter ID, or Passport is needed.
For Foreign Promoters: A valid copy of the Passport is required.
Proof of Residence: A recent utility bill, bank statement, or telephone bill can be submitted as evidence of address.

For the Company

View the documents required for the company.

Utility Bill: A recent utility bill (issued within the last 2 months) is required to verify the company’s registered address.
Lease Agreement: If the company operates from rented premises, a copy of the lease agreement is necessary.
Owner’s No Objection Certificate (NOC): If the business is located in a rented space, a No Objection Certificate from the property owner is required.

Stages of Private Limited Company Incorporation

Application

Submit the application for name reservation of the proposed company.

Digital Signature

Obtain the Digital Signature Certificate (DSC).

Draft Finalization

Draft and finalize the Memorandum of Association (MOA), Articles of Association (AOA), and other necessary documents.

Complete

Complete the incorporation process to receive the incorporation certificate, PAN, and TAN.

Our Pricing Plans

Choose the plan that best fits for you. We have three major plans to offer.

Starter

₹1999+ Govt Fees
  • Name Application(within 3 Days)
  • Digital Signature Certificates for two (within 3 Days)
  • Director Identification Number for two directors
  • SPICe+ form filing in 18 days
  • Company incorporation certificate in 25-35 Days
  • Memorandum of Association (MOA)
  • Articles of Association (AOA)
  • PAN
  • TAN
  • 2 e-copies of Share Certificates
  • ESIC Registration through SPICe Plus
  • PF Registration through SPICe Plus
Choose Plan

Growth

₹3499+ Govt Fees
  • All features outlined in the Starter package.
  • One time filing GST registration application
  • INC- 20A Filing
  • MSME Registration
  • Name Application (within 2 Days)
  • Digital Signature Certificates for two (within 2 Days)
  • SPICe+ form filing in 14 days with expert assistance
  • Company incorporation certificate in 22-30 Days
Choose Plan

Elite

₹17499+ Govt Fees
  • All features outlined in the Growth package.
  • One trademark filing in the name of an individual, sole proprietor
  • Four quarterly TDS returns
  • One annual filing (for turnover up to 30 lakhs)
  • Form ADT-1 (Auditor appointment during the AGM)
  • Form AOC-4 (Form for submitting financial statements and other documents to the Registrar)
  • Form MGT-7 (Form for filing the annual return by a company)
  • DIR-3 e-KYC for two directors
  • Accounting and bookkeeping services (up to 75 transactions)
Choose Plan

PAN and courier charges: 250

State of Registration2 DSC RUN + PAN/TANState filing fee for Authorized share capital of 1 LakhEstimated Total Amount
Maharashtra₹4,600₹1,456₹1,300₹ 7,356
Delhi₹4,600₹1,456₹360₹ 6,416
West Bengal₹4,600₹1,456₹370₹ 6,426
Uttar Pradesh₹4,600₹1,456₹1,010₹ 7,066
Karnataka₹4,600₹1,456₹10,020₹ 16,076
Tamilnadu₹4,600₹1,456₹520₹ 6,576
Telangana₹4,600₹1,456₹1,520₹ 7,576
Gujarat₹4,600₹1,456₹620₹ 6,676
Haryana₹4,600₹1,456₹135₹ 6,191
Rajasthan₹4,600₹1,456₹5,500₹ 11,556
Kerala₹4,600₹1,456₹3,025₹ 9,081
Bihar₹4,600₹1,456₹1,600₹ 7,656
Madhya Pradesh₹4,600₹1,236₹7,550₹ 13,606
Andhra Pradesh₹4,600₹1,456₹1,520₹ 7,576
Odisha₹4,600₹1,456₹610₹ 6,666
Punjab₹4,600₹1,456₹10,025₹ 16,081
Jharkhand₹4,600₹1,456₹173₹ 6,229
Assam₹4,600₹1,456₹525₹ 6,581
Chhattisgarh₹4,600₹1,456₹1,510₹ 7,566
Uttarakhand₹4,600₹1,456₹1,010₹ 7,066
Chandigarh₹4,600₹1,456₹1,503₹ 7,559
Jammu and Kashmir₹4,600₹1,456₹310₹ 6,366
Goa₹4,600₹1,456₹1,200₹ 7,256
Himachal Pradesh₹4,600₹1,456₹183₹ 7,239
Puducherry₹4,600₹1,456₹510₹ 6,566
Manipur₹4,600₹1,456₹260₹ 6,316
Tripura₹4,600₹1,456₹260₹ 6,316
Meghalaya₹4,600₹1,456₹410₹ 6,466
Arunachal Pradesh₹4,600₹1,456₹710₹ 6,766
Nagaland₹4,600₹1,456₹260₹ 6,316
Andaman and Nicobar Islands₹4,600₹1,456₹520₹ 6,576
Daman and Diu₹4,600₹1,456₹1,170₹ 7,226
Dadar nagar Haveli₹4,600₹1,456₹41₹ 6,097
Mizoram₹4,600₹1,456₹260₹ 6,316
Lakshadweep₹4,600₹1,456₹1,525₹ 7,581
  • 1,999 extra per DSC, courier charges extra
  • Application filing (SPlCe+) time depends on MCA portal availability and best efforts will be taken by eTaxCart to complete in stated time
  • Above government fees might change depending on the notification released time to time by respective Govts.
  • Government fees for trademark extra in pro package
  • Audit is not included

Why Choose Us for Private Limited Company Registration?

At eTaxCart, our mission is to make tax and compliance stress-free — so you can focus on growing your career, your business, or your next big idea.

Simple and Quick Process

We make the registration process smooth and hassle-free, ensuring you can focus on growing your business.

Affordable Fees

Our registration services are cost-effective, offering great value for your investment in establishing a Private Limited Company.

Expert Guidance

Our professionals guide you through every step of the registration process, ensuring it is seamless and efficient.

Frequently Asked Questions

Here are the answers of the questions we received frequently.

Why should I start a Private Limited Company?

Starting a Private Limited Company helps protect your personal belongings. If the company faces financial problems, your personal assets like your house or savings are shielded because the company’s debts are its responsibility, not yours. This separation provides peace of mind, allowing you to focus on your business growth without worrying about personal liabilities.

How many people do I need to start a Private Limited Company?

To start a Private Limited Company, you need at least two people. This means you and a partner, or two family members or friends, can join forces to set up the company. With at least two shareholders and two directors, you can manage and run the business efficiently while sharing responsibilities and decisions.

What is a Digital Signature?

A Digital Signature is an electronic version of your physical signature, used to authenticate and sign documents online. It serves as a secure method to verify your identity and approve official paperwork. This is an essential part of company registration, as it speeds up the process and ensures that all your filings are legally binding.

What’s the difference between a Private Limited Company and a Sole Proprietorship?

 

A Sole Proprietorship is a one-person business, where the owner is personally responsible for the business’s debts. A Private Limited Company, however, is a separate legal entity, which means the company itself is responsible for its debts, not its owners. This offers better protection for personal assets and increases credibility.

What is the role of a director?

 

A director in a Private Limited Company is responsible for overseeing the company’s operations and making strategic decisions. They guide the company’s direction, ensure compliance with regulations, and protect shareholder interests. Think of directors as captains of the ship, making sure everything runs smoothly and according to plan.

What are "shareholders" in a Private Limited Company?

 

Shareholders are individuals or entities who own shares in the company, essentially owning a part of the business. Each share represents a portion of ownership and gives the shareholder rights to vote on important company decisions. The more shares a shareholder owns, the greater their influence and ownership in the company.

Why should I choose eTaxCart for my company registration?

eTaxCart simplifies the entire process of Private Limited Company registration with expert guidance at every step. Our team manages all aspects—from documentation and form filing to ensuring compliance with government regulations. By choosing eTaxcart, you ensure a seamless, efficient, and hassle-free company incorporation experience.

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