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 Partners: 200
• Minimum capital: Zero {omitted by the Companies (Amendment) Act, 2015}
• limited liability
• Minimum number of Directors: 2
• Foreign investment permitted (subject to material sector cap under FDI rules)
• Continuity of presence: business not influenced by the status of the owner.

Procedure for the Constitution of a Private Limited Company

1. Obtain a Digital Signature Certificate (DSC) for the proposed Director who does not have a DSC;
2. Obtain the Directors 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 the details of the applicant must be as per PAN of PAN rent)
• Proof of address: Copy of Passport or Election/Voter Certificate or Ration Card or Driver’s License (location with PIN code) or Electricity/Telephone Bill (Utilities) or AADHAR Card. This should be “Applicant Name” only and should not be set more than 2 months from the date of electronic form documentation.
• Photograph (last passport size in JPG format)
• *Current occupation
• *Applicant email address
• *Mobile/cellular number
• *Academic preparation
• *Verification to be signed by the Applicant.

Request the Reservation of Name on Form INC-1 along with the prescribed fees.

After obtaining MCA name approval, you must apply for the certificate of incorporation. There are 3 forms that need to be uploaded:-

1. INC Form – 7
2. INC Form – 22
3. 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/Lease Deed/Rental Agreement
• NOC of the owner of the premises, if the lease is addressed
• Form DIR-2
• Directors Directory points of interest in different Companies/LLPs, if any.

1. Form INC-7: Form INC-7 for the Application for incorporation of a company.
2. Form INC-22: Notice of situation or change of situation of registered office based on the option chosen in Form INC-7. The INC-22 form must be filed within 30 days from the date of incorporation of the company Pvt Ltd.
3. Form DIR-12: Details of 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% income tax, if taxable income exceeds Rs 1 crore up to Rs 10 crore

–>10% income tax, if taxable income exceeds Rs 10 million

Education Rate –> 2%

SHEC —>1%

Minimum Alternative Tax (MAT) @ 18.5% on Accounting Profits in addition to overload and cessation, as appropriate.

Indirect tax:

Service tax:

The registration of the service tax is an element of the gross billing. Once the turnover of the appraised crosses a cut-off point of Rs 9 lacs, the service provider is required to register under the law, and must compulsorily charge a service tax on the services provided once the turnover crosses Rs 10 lacs.

VAT:

VAT (Value Added Tax) registration is required for merchants who have a turnover of more than Rs 5 lacs. Upon registration, that merchant is assigned a new 11-digit Taxpayer Identification Number (TIN).

CST:

The registration of the CST (Central Sales Tax) is not relevant in terms of billing. Basically, the merchant’s registration becomes necessary once it influences an inter-state agreement.