Constitution of a Private Limited Company
Characteristics of the Private Limited Company:
- Separate Legal Existence
- Annual general meeting: only a limited liability company can dispense with the obligation to hold an annual general meeting
- Share Capital Limits – There are no minimum or maximum share capital requirements.
- Minimum number of Members: 2; Maximum number of Members: 200
- Minimum Capital: Zero {omitted by the Companies (Amendment) Act, 2015}
- limited liability
- Minimum number of Directors: 2
- Foreign investment allowed (subject to the material sectoral cap according to the FDI rules)
- Continuity of presence: business not influenced by the status of the owner.
Procedure for the Constitution of a Private Limited Company
- Obtain Digital Signature Certificate (DSC) for the proposed Director who does not have a DSC;
- Obtain the Director Identification Number (DIN) for the proposed Director who does not apply to have a DIN from the Ministry of Corporate Affairs (MCA) on Form DIR-3;
Requirement for Form DIR-3:
- Proof of Identity: Copy of PAN card (Permanent Income Tax Account Number (PAN) is required if an Indian citizen is produced and in such cases applicant details should be as per PAN of Income Tax rent)
- Proof of address: Copy of Passport or Election/Voting ID or Ration Card or Driving License (location with PIN code) or Electricity/Telephone Bill (Utilities) or AADHAR Card. This must be “Applicant Name” only and must not be set more than 2 months from the date of documentation of the electronic form.
- Photograph (latest passport size in JPG format)
- *Current occupation
- *Email address of the applicant
- *Mobile/cell phone number
- *Academic preparation
- *Verification to be signed by the Applicant.
Apply for Name Reservation on Form INC-1 together with the prescribed fees.
After getting the MCA name approved, you need to apply for the certificate of incorporation. There are 3 forms that need to be uploaded:-
- Form INC – 7
- Form INC – 22
- Form DIR-12
Requirement for Form INC-7, Form INC-22, Form DIR-12:
- Memorandum of Association (MOA) and Articles of Association (AOA).
- INC-8 duly notarized
- INC-9 duly notarized
- INC-10 duly confirmed by the banker or legally approved
- Affidavit of non-recognition of deposit
- Full address of the Police Station under whose jurisdiction the registered office is located.
- Utility bill (not older than two months) from the registered office location
- Transportation/Deed of Lease/Rental Agreement
- NOC of the premises owner, if the lease is addressed
- DIR-2 form
- Directors Directory points of interest at different Companies/LLPs, if any.
- Form INC-7: Form INC-7 of Application for company incorporation.
- Model INC-22: Notice of situation or change of situation of registered office based on the option chosen in Model INC-7. Form INC-22 must be filed within 30 days from the date of incorporation of the company Pvt Ltd.
- Form DIR-12: Details of the appointment of directors and key management personnel and changes between them.
Upon investigation and examination of the forms mentioned above, the relevant Registrar of Companies (ROC) can issue the company’s Certificate of Incorporation along with the Corporate Identification Number (CIN).
Company Taxation
direct tax
Corporate tax rates
Detailed report –>National company
Tax Rate –>30% of Total Income
Surcharge –>5% of income tax, if taxable income exceeds Rs 1 crore up to Rs 10 crore
–>10% income tax, if taxable income exceeds Rs 10 crore
Education rate –> 2%
SHEC —>1%
Minimum Alternative Tax (MAT) @ 18.5% on Book Profits in addition to overload and cessation, as appropriate.
indirect tax:
Service tax:
The registration of the service tax is an element of gross billing. Once the appraisee’s turnover crosses a cut-off point of Rs 9 lacs, the service provider is required to register under the law, and must mandatorily charge a service tax on the services rendered once the turnover crosses Rs 10 lac.
VAT:
VAT (Value Added Tax) registration is required for merchants who have a turnover of more than Rs 5 lacs. Upon registration, such a merchant is assigned a new 11-digit Taxpayer Identification Number (TIN).
STS:
The registration of the CST (Central Sales Tax) is not relevant in terms of billing. Basically, merchant registration becomes necessary once you influence an interstate agreement.