COMPANY INFORMATION
Private Limited Company
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As per the Companies Act, 1956 Private Limited
Company is a company, which has the following features in its Articles of
Association:
1. Limits the number of shareholders to 50
2. Restricts the right of shareholders to
transfer their shares.
3. Prohibits any invitation to the public to
subscribe for any shares in, or debentures of, the company;
4. Prohibits any invitation or acceptance of
deposits from persons other than its Members Directors or their Relatives;
Provided that where two or more persons hold one or more shares in a company
jointly, they shall, for the purposes of this definition, be treated as a
single member
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Foreign Investment
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As Foreign Direct Investment (FDI) Policy,
Foreign Investment is allowed under all sectors under automatic and approval
route, except the following:
1. Railways,
2. Atomic Energy,
3. Gambling & Betting, Lottery and
4. Retail Trading (except single brand).
5. Business of chit fund.
6. Nidhi Company.
7. Trading in Transferable Development Right
8. Agriculture excluding floriculture,
horticulture, development of seeds, animal husbandry, pisiculture,
cultivation of vegetables , mushrooms under controlled conditions &
services related to agro and allied sectors.
9. Plantation excluding Tea Plantation
10. Real Estate Business (but does not include
development of townships, construction of residential / commercial premises,
roads or bridges educational institutions, recreational facilities, city and
regional level and infrastructure, townships.
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Corporate Taxation
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1. Income-tax: 30% of total income.
2. Surcharge: 5% (surcharge from 5 to 10
percent on domestic companies whose taxable income exceed Rs.10 Crore)
and Education Cess: 3%
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Incorporation Requirement
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1. Minimum 2 Directors are required, there is
no requirement of residency in India
2. Minimum 2 Shareholders are required; there
is no requirement of residency in India.
3. Every Director should have Directors
Identification Number
4. Any one Director & Shareholders should
have Digital Signatures
5. Minimum authorized & paid up capital
required is Rs 0.1 million
6. Registered Office is required
7. Company Name requirement:
a. Name should not be similar /identical to existing registered
company
b. Name should not contains prohibited words like National, Union,
Central etc
c. Use of words like India, International, Industries etc are
allowed only, if the company have minimum prescribed authorized capital.
d. Use of certain words like Banks, Venture Capital, requires
approval of prescribed authority in India.
e. Name should end with suffix, Private Limited.
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Incorporation Procedure:
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1. Directors shall obtain Director
Identification Number, if they don’t have.
2. Any one shareholder & Director will
obtain Digital Signatures, if not previously held.
3. Application for name approval shall be filed
to Registrar of Companies
4. After name approval, documents for
incorporation shall be filed along with Memorandum & Articles of
Association with Registrar of Companies.
5. If documents are in order, Registrar of
Companies will issue certificate of incorporation, which will evidence of
company incorporation.
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Document required for obtain
Directors Identification Number & Digital Signatures:
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1. Notarized copy of Identity & Residential
Proof in English language.
2. Copy of passport for non residents is must
3. Photograph of Director
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Company Secretary
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Companies with paid-up capital Rs 5 cr or more
are required to appoint a whole time Company Secretary.
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Books of Accounts
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Companies are required to maintain proper book
of account according to double entry system and accrual basis of accounting.
At the end of each financial year, Companies are required to prepare Balance
Sheet and Profit & Loss Account for that financial year.
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Audit Requirement
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Companies are required to get the Balance Sheet
& Profit & Loss account audited by the Statutory Auditor of the
Company. Only a chartered accountant in practice can be appointed as the
statutory auditor.
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Meeting Requirement
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Board of Directors are required to meet, every
quarter in a calender, the meeting can be held anywhere in India. Meeting
cannot be called through video conferencing.
Shareholder meet once in a year, called as
Annual General Meeting, to approve the balance sheet and profit & loss
account of the Company. This meeting can be held only in the same city or
town, where the registered office is situated. Meeting cannot be called
through video conferencing.
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Annual Filling Requirement
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Companies are required to file Balance Sheet,
Profit & Loss Account along with Directors Report & Auditors Report
and Annual Return, separately, with the Registrar of Companies, in each
calendar year.
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