The 2023 – 24 financial year saw the registration of over 185000 companies in India. By listing your company in the Registrar of Companies and getting it incorporated under the Companies Act of 2013, you can get legal credibility and protection. These companies have the “Private Limited” prefix and are listed as a unique entity.
If you want to establish your company as a top brand, identified by its name and logo, opting for a Private Limited Company Registration is essential.
Importance Private Limited Company Registration
Having a Private Limited Company Registration is important for companies that want to make their mark on the business landscape. Not only does this boost the image of the company, but it also provides the company and its owners’ legal protection. With the Private Limited prefix, it becomes easier for a company to raise capital from the market by issuing shares.
However, getting your company incorporated with the Private Limited Company Registration involves certain steps with the possibility of mistakes, leading to delays.
Common Mistakes to Avoid During Private Limited Company Registration
To have a streamlined process when opting for Private Limited Company Registration for your business, you need to avoid the following:
Choosing a Company Name already present in the ROC
Brand names and logos in India are governed by various rules, including the Companies Act 2013, the Companies Incorporation Rules 2014, and the Trademark Act, 1999. Further, you cannot use a Company name that is already in use and registered with the Registrar of Companies (ROC). Before choosing a company name, you need to look through the MCA portal, as well as the database of the Controller General of Patents, Designs, and Trademarks.
Choosing the Wrong Business Structure
Companies can be set up under Sole proprietorship, as an LLP, a Private Limited Company, or others. When registering your company, you need to provide the necessary details pertaining to your business. Formulate a structure that works well for your company, helps raise funds, and provides succession continuity.
Absence of a Proper and Thorough Partnership Deed
An AOA (Articles of Association) acts as a deed that outlines the management structure of your company and how liabilities have been distributed. Without the clear-cut layout established with an AOA, there is ambiguity which can lead to disputes among shareholders. Further, having the AOA is essential when applying for Private Limited Company Registration.
Not Providing the Right Supporting Documents
Along with your application, a number of documents are required for a Private Limited Company Registration. These include:
- the Digital Signature Certificate,
- a Director Identification Number (DIN),
- an MOA,
- a well-drafted AOA, and
- Bank and tax documents.
Absence of any of these will lead to a rejection or put your application on hold.
Inconsistencies in the Data Submitted
Mistakes as small as a typo, spelling error, or wrong data will delay your application for Private Limited Company Registration.
Unnecessary Appointments in Ownership and Management Positions
Not everyone who is a shareholder needs to be a director or on the board. The Board of Directors should bring dynamic expertise to the table. Thus it needs to comprise of market experts as well as key investors. Further, at least one of the Directors should be a citizen of India to apply for Private Limited Company Registration.
Overlooking Tax Norms
When applying for Private Limited Company Registration, your company needs to have an official PAN and separate business accounts. Further, they need to be registered for GST, ESIC, EPFO, and others, as applicable. These serve as the basis on which they apply for registration.
Not Having the Necessary Licenses
Based on the industry you are operating in, you have to get specific licenses. Some of these are:
- FSSAI License: for food-based industries.
- Drug License: for medical companies.
- Factory License: for manufacturing companies.
Further, companies need to maintain compliance with IS Codes and Standards that are relevant to them. Before applying for a Private Limited Company Registration, you need to ensure that you have all the necessary licenses for your company.
Absence of a Proper Address and Rental Agreements
Providing an Indian address is an important part of applying for Private Limited Company Registration. Rental Agreements hold legal importance and serve as an official document. You need to get a formal rental agreement to ensure that the location you are using serves as your formal address for the registration process.
10. Not Keeping Appraised of Local Laws
Maintaining the Law of the Land is essential when running a business. When establishing a business in India, there are a lot of rules and complexities involved in the legal and regulatory landscape. Opting for Legal Advisory Services helps you stay on top of changes that come up.
Addressing Mistakes Made During Private Limited Company Registration
The easiest and most effective way to address the above issues is by opting for professional help that involves Private Limited Company Registration and Legal Advisory Services. Having a team of legal experts well versed in Company Law in your corner is helpful when any issues occur.
By availing of Legal Advisory Services, you get the below benefits:
- Expedites the process
- Ensures legal and regulatory compliance
- Manages risk associated with various business processes
- Coordinates with the various officials to get licenses
To Conclude
For on-time approval during Private Limited Company Registration, it is always better to get expert help. This comes in the form of facilitators who provide company registration as well as legal advisory services.
Not only does this make the entire process easy to tackle but also helps prevent usual mistakes that occur. Further, in case of any issues, they take up redressal to resolve these issues to obtain the Registration.