Constitution of a Private Limited Company
Characteristics of the Private Limited Company:
- Separate legal existence
- Annual General Meeting – Only a Private Limited Partnership 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
- Allowable foreign investment (subject to material sectoral limit in accordance with FDI rules)
- Continuity of presence: business not influenced by the condition of the owner.
Procedure for the constitution of a private stock company
- Obtain the Digital Signature Certificate (DSC) for the proposed Director who does not have DSC;
- Obtain the Director Identification Number (DIN) for the proposed director who is not applying to have the DIN from the Ministry of Corporate Affairs (MCA) on the DIR-3 form;
Requirement for form DIR-3:
- Proof of Identity: Copy of PAN card (Permanent Income Tax (PAN) account number is required if Indian National occurrence occurs and in such cases applicant’s details must be as per the PAN of the tax about the rent)
- Proof of Address: Copy of Passport or Election / Voter ID or Ration Card or Driver’s License (location has PIN code) or Electric / Telephone Bill (Utilities) or AADHAR Card. This should only be “Applicant Name” and should not be established more than 2 months from the e-from documentation date.
- Photograph (last passport size in JPG format)
- * Current occupation
- * Applicant’s email address
- * Mobile / cell phone number
- * Educational qualification
- * Verification to be signed by the Applicant.
Request the Name Reservation on Form INC-1 along with the prescribed fees.
After you get approval of the MCA name, 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 a 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 (no more than two months) from the registered office premises
- Transfer / Lease Deed / Rental Agreement
- NOC of the premises owner, if leasing is addressed
- Form DIR-2
- Directors Points of interest of the management in different Companies / LLPs, if any.
- Form INC-7: Form INC-7 of Application for incorporation of a company.
- Form INC-22: Notice of situation or change of situation of registered office based on the option chosen in Form INC-7. Form INC-22 must be submitted within 30 days from the date of incorporation of the company Pvt Ltd
- Form DIR-12: Appointment details of directors and key management personnel and changes between them.
Upon investigation and examination of the forms listed above, the Registrar of Companies (ROC) in question may issue a Certificate of Incorporation of the Company 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 Cess -> 2%
SHEC —> 1%
Alternative Minimum Tax (MAT) @ 18.5% on accounting earnings in addition to the surcharge and rate, as applicable.
Indirect tax:
Tax service:
The service tax record is an element of gross billing. Once the assessed turnover crosses a lake threshold of Rs 9, the service provider is obliged to register under the law and is mandatorily required to collect taxes on the services provided once the turnover crosses the lakes of Rs 10.
VAT:
VAT (value added tax) registration is required for traders who have a turnover of more than Rs 5 lacs. Upon registration, said merchant is assigned a new 11-digit Taxpayer Identification Number (TIN).
CST:
The CST (Central Sales Tax) record is not related to the measurement of turnover. Basically, the registration of the merchant becomes necessary once it influences an agreement between states.