Starting a business in Rajasthan requires a lot of planning, hard work, and legal compliance. Among the most common types of business entities, a Private Limited Company is the most preferred option by entrepreneurs due to the many benefits it offers, including limited liability protection, credibility, and ease of raising funds. In this article, we will guide you through the process of Legal Requirement for Incorporating Private Limited Companies in Rajasthan.
Meaning of Private Limited Company
Private Limited Companies are the most well-liked and efficient option for entrepreneurs seeking increased growth in India. For higher growth hopefuls, the most common and effective medium for beginning a business in India is a Private Limited Company. It is incorporated under the Companies Act, 2013.
A Private Limited Company is a type of business entity registered under the Companies Act, 2013. It has a separate legal entity from its owners and shareholders, which mean the company can own assets, enter into contracts, and sue or be sued in its own name. The liability of the shareholders is limited to the amount of unpaid share capital they hold in the company, and they are not personally liable for the company’s debts and obligations.
So, if you want to form a company, the first step is to register it. Once registered, it boosts its validity as well as providing many benefits such as liability protection to secure the Company’s assets, attracting more and more finances, and so on.
Scope of Incorporating Private Limited Companies in Rajasthan
Even today, Rajasthan is one of the most popular business locations for individuals all over the world in the new-age business hub. National and worldwide business titans are drawn to this great state for a variety of reasons, including abundant investment-friendly regulations, natural resources, a big and untapped talent pool, and a secular environment.
A variety of innovative programs, including the present state government’s Industrial and Investment Promotion Policy (RIIP), have increased the state’s investment forecast. Therefore, we believe that Rajasthan is an excellent location to establish your company and begin your business.
Advantages of Private Limited Companies in Rajasthan
The following are some of the benefits of forming a private limited company:
- Restricted liability: Shareholders’ liability is restricted to the amount invested in the firm, and their personal assets are safeguarded from the company’s debts and losses.
- A private limited company is a legal entity distinct from its owners, which means it can possess assets, enter contracts, and sue or be sued in its own name.
- A private limited corporation enjoys perpetual succession, which means it will continue to exist even if the stockholders change or die.
- Ease of raising funds: A private limited corporation can readily raise funds by issuing shares, debentures, and other instruments.
- Better borrowing options: A private limited corporation can issue both secured and unsecured debentures, as well as accept public deposits.
- Tax advantages: A private limited company is eligible for a variety of tax advantages, including deductions for business expenses, depreciation, and research and development costs.
- Credibility: A private limited company has greater credibility than a sole proprietorship or partnership, which can assist attract customers, investors, and workers.
Legal Requirements for Incorporating Private Limited Company in Rajasthan
The following are the requirements for forming a private limited company in Rajasthan:
- A minimum of two shareholders are required for a private limited company.
- The private limited company is required to manage all the compliances after incorporation of the company like appointment of statutory auditor, filing commencement of business, Income Tax Filing, Annual Returns with ROC, and other compliances as required by the law.
- Directors: A private limited company must have at least two directors, at least one of whom must be an Indian resident.
- Capital: A private limited company must have a minimum authorized capital of Rs. 1 lakh, but no minimum paid-up capital required.
- Members: A private limited company must have at least two and no more than 200 members.
- Digital Signature Certificate and Directors Identification number if required.
- Private Limited Corporations are required by law to maintain a registered office in India.
- The company name is an important part of the incorporation procedure. A distinct name that is not same or like the name of any existing firm is essential.
- The company name should be distinctive and end with the words ‘Private Limited’.
- There are no minimum criteria for approved or paid-up capital.
- The corporation must have a registered office in India, which can be commercial or residential.
Documents Required for incorporation
The documents required for incorporation of private limited companies are:
- Photograph of all directors.
- ID proof for all directors, such as Aadhaar card, passport, or driving license.
- Address verification for all directors, such as a bank statement, an electricity bill, or a telephone bill.
- Articles of Association (AOA) and Memorandum of Association (MOA).
- One of the directors’ Digital Signature Certificate (DSC).
- Each director’s Director Identification Number (DIN).
- Evidence of registered office address, such as a power bill, phone bill, or property tax receipt
Process of incorporating a Private Limited Company in Rajasthan
The procedure for incorporating a private limited company in Rajasthan is as follows:
- Obtain for each director a Digital Signature Certificate (DSC) and a Director Identification Number (DIN).
- Utilize the Ministry of Corporate Affairs (MCA) portal to request the availability of the company name.
- Create the company’s Memorandum of Association (MOA) and Articles of Association (AOA).
- The incorporation paperwork, including the MOA, AOA, and Form SPICe, must be filed with the Registrar of Companies (ROC) via the MCA portal.
- Pay the required fees and stamp duty for the company’s incorporation.
- Obtain the Certificate of Incorporation (COI) from the ROC, which serves as documentation of the company’s existence.
- Apply to the Income Tax Department for the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
- Create a bank account in the company’s name and deposit the minimum permissible capital.
Conclusion
In conclusion, forming a Private Limited Company in Rajasthan entails various legal conditions that must be met. Appointing directors and shareholders, obtaining a Digital Signature Certificate and Director Identification Number, reserving the company name, etc., are all part of the process. To obtain a Certificate of Incorporation and constitute a legal organization, all procedures must be followed precisely and in accordance with the regulations. As a result, the corporation can benefit from limited liability, everlasting succession, and simple access to finance, making it a popular type of business in India.
