A private limited company is one of the ways to start your business in India. It is considered as best form of business which also secure your personal assets. It is most recommended form for startup in India to raise funding, ESOPs etc.
# Students: Students over and above the age of 18 can form any type of company in India.
Employees: Employees are generally not allowed by their employers to form a company and be a director. They may hold shares but cannot take position as director. If you want to open a company, then check your employment agreement and you may also seek permission from the respective employer.
# Person with criminal background: Though they are not barred to form a company, however, they need to give various declarations to the ROC.
How to raise funding in a Private Limited Company?
Build a plan and a working business model: Gone are those days when you can get funding on the basis of an idea.Now, is the time, that you should test your own idea, reach a MVP and then build a strong future plan.
Reach investors and sign the term sheets: In this step, you must reach different investors and explain them your model, future plans and how they can earn if they invest into your business.
Prepare Documents: Once you sign the term sheet, next and final step is to prepare documents like Shareholder agreement etc.
Mandatory Compliances after Private (Pvt) Company Registration
BM : Every private company needs to call minimum 4 board meeting as per the Companies Act, 2013.
Filings : A company needs to file MGT 14 from time to time. Also, needs to prepare some statutory registers.
Annual : This is most important where annual filing needs to be completed within time.
How to choose Company name for Pvt. Company Registration?
# ABC - Prefix: The prefix should reflect your brand name and should be unique. I.e. no it should not match with any existing company or trademark. The example of prefix i.e. your first word is TATA, Reliance, Hubco etc.
# Technologies - Suffix: It is regarded as the second word of your company name. This should reflect your main proposed business. E.g., if you are into technology company, then write technology, for steel business, you can use TATA Steel Ltd.
# Private Limited - End: These are the ending words which are mandated by law. Every private company shall end his name with Private Limited. The words indicate that Private meaning no public is involved and limited means capital is limited.