What is a Private Limited Company?

A Private Limited Company is a closely‑held business entity where ownership is divided into shares held by a limited number of people. Its key features include:

• Minimum of two shareholders and two directors are required.
• Maximum of 200 members are allowed, keeping control within a defined group.
• Shares are not freely tradable to the public and can be transferred only with internal approvals.
• The company has its own legal identity, separate from its shareholders and directors.

Key Points to Remember Before You Register

• Decide on a unique company name that is not identical or similar to an existing registered name or trademark.
• At least one director must be an Indian resident as per Companies Act requirements.
• You need a registered office address in India where official notices can be served.
• All proposed directors require a Digital Signature Certificate (DSC) and a Director Identification Number (DIN).
• Shareholding pattern and capital structure should be planned in advance to avoid frequent changes later.

Benefits of Private Limited Company Structure

1. Low Minimum Capital Requirement You can incorporate a private limited company with a modest authorised capital and increase it as the business grows.
2. Separate Legal Identity The company can own property, open bank accounts, enter into contracts and sue or be sued in its own name, independent of the owners.
3. Limited Liability Shareholders’ personal assets are generally protected; their risk is limited to the amount invested in company shares.
4. Easier Access to Funding Investors, angel funds and venture capitalists usually prefer investing in private limited companies due to clear shareholding and governance norms.
5. Perpetual Succession The company continues to exist even if shareholders or directors change, ensuring continuity of business operations.
6. Eligibility for ESOPs and Employee Benefits Private limited companies can design stock option plans to attract and retain key talent.
7. Improved Brand Perception Having “Private Limited” in the name signals seriousness and professionalism to customers, suppliers and partners.

Process and Steps for Private Limited Company Registration in Mumbai

1. Step 1 – Planning & Name Reservation: Finalise the proposed name, main objects and shareholding pattern, then apply for name availability through the MCA portal.
2. Step 2 – Obtain Digital Signatures: Secure DSCs for all proposed directors and authorised signatories to enable e‑signing of forms.
3. Step 3 – Draft Incorporation Documents: Prepare the Memorandum of Association (MoA), Articles of Association (AoA) and supporting declarations and attachments.
4. Step 4 – File SPICe+ Incorporation Form: Submit the integrated incorporation form on the MCA portal along with PAN, TAN and other registrations as required.
5. Step 5 – Receive Certificate of Incorporation: Once the Registrar of Companies verifies the application, the Certificate of Incorporation is issued and the company comes into legal existence.

Checklist of Documents for Private Limited Company Registration

• PAN and Aadhaar of all proposed directors and shareholders
• Recent passport‑size photographs of directors
• Address proof of directors (passport, driving licence, voter ID, etc.)
• Proof of registered office (rent agreement / ownership document) and latest utility bill
• No‑objection letter from the owner of premises, if the office is on rent or lease
• Draft of main objects / business activities to be carried out by the company
• Email IDs and mobile numbers of all directors and primary contact person