Private Limited Company Incorporation: Process and Cost
A Private Limited Company is the most popular business structure in India for startups and growing businesses. It offers limited liability, a separate legal identity, and the ability to raise institutional funding - all without a minimum paid-up capital requirement.
Overview
Under the Companies Act, 2013, a Private Limited Company is a distinct legal person separate from its shareholders and directors. The company can own property, enter contracts, sue and be sued in its own name. Shareholders’ liability is limited to the amount unpaid on their shares - personal assets are protected from business debts.
2
Minimum Directors
At least 1 must be an Indian resident
2
Minimum Shareholders
Can be the same 2 people as directors
7–10
Working Days
Typical time to Certificate of Incorporation
The company name must end with the words “Private Limited”. There is no minimum paid-up capital required by law - you can incorporate with a nominal share capital of ₹1,000 or any amount you choose.
Prerequisites
Before filing, each proposed director must have two things:
- DSC - Digital Signature Certificate: Used to sign all electronic filings on the MCA portal. Obtain a Class 3 DSC from any government-authorised certifying authority (e.g. eMudhra, Sify, NSDL). Processing takes 1–2 working days.
- DIN - Director Identification Number: A unique identifier allotted to every individual who wishes to be a director of a company. Apply via Form DIR-3 on the MCA21 portal if you do not already have one. DIN can also be obtained as part of the SPICe+ incorporation form itself.
One Indian resident director is mandatory
Section 149(3) of the Companies Act requires at least one director to have been present in India for a total of 182 days or more during the preceding calendar year. A foreign national who is not resident in India cannot be the sole director.
Incorporation Process via SPICe+
All Private Limited Company incorporations are filed through the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form on the MCA21 portal. SPICe+ is a single integrated form that handles name reservation, incorporation, DIN allotment, PAN, TAN, GST, EPFO, ESIC, bank account, and professional tax registration in one submission.
Obtain DSC for all proposed directors
Apply for a Class 3 Digital Signature Certificate from an authorised certifying authority. Each director needs their own DSC.
Apply for DIN via Form DIR-3 (if not already held)
File DIR-3 on the MCA21 portal with PAN, Aadhaar, photograph, and address proof of each proposed director. DIN can also be applied for within SPICe+ itself.
Reserve the company name via the RUN service
Use the RUN (Reserve Unique Name) service on MCA21 to check availability and reserve up to two name choices. The name must end in "Private Limited" and must not be identical or deceptively similar to any existing company or trademark.
Fill SPICe+ Part A - basic details
Enter the type of company, class of company, category, main division of industrial activity, and the approved name.
Fill SPICe+ Part B - directors, subscribers, and capital
Enter details of all directors and subscribers (shareholders), registered office address, authorised and paid-up capital, and professional certification.
Draft the MOA (INC-33) and AOA (INC-34)
The Memorandum of Association defines the company's objects (its permissible business activities). The Articles of Association set out the internal governance rules. These are filed electronically as e-MOA and e-AOA.
Fill AGILE-PRO for ancillary registrations
AGILE-PRO (Form INC-35) is filed alongside SPICe+ to obtain GST registration, EPFO registration, ESIC registration, a professional tax number, a bank account, and a shop and establishment registration - all at the same time.
Attach all supporting documents
Upload identity and address proofs for all directors and subscribers, office address proof, and NOC from the property owner if the registered office is rented.
Pay the government fee and submit
Pay the MCA filing fee (based on authorised capital) and stamp duty. Submit the complete application. The RoC processes the application and, if in order, issues the Certificate of Incorporation.
Receive the Certificate of Incorporation
The Certificate of Incorporation (COI) includes the CIN (Corporate Identity Number), the company's PAN, and the TAN. The company is now a legal entity.
Documents Required
- ✓PAN card of all proposed directors and shareholders
- ✓Aadhaar card of all proposed directors and shareholders
- ✓Passport-size photographs of all directors
- ✓Address proof of all directors (bank statement, utility bill, or telephone bill - not older than 2 months)
- ✓Utility bill for the registered office address (electricity or telephone bill - not older than 2 months)
- ✓NOC from the property owner if the registered office is on rented premises
- ✓DSC of all proposed directors
- ✓Consent to act as director (Form DIR-2)
- ✓Declaration by subscribers and first directors (INC-9) - auto-generated in SPICe+
Cost and Timeline
| Item | Amount |
|---|---|
| Government filing fee (MCA) | ₹0 for authorised capital up to ₹15 lakh; ₹2,000 for higher capital |
| Stamp duty (state-specific) | Varies by state and authorised capital - typically ₹1,000–₹5,000 |
| Professional / CA fees | ₹7,000–₹15,000 (typical range) |
| DSC per director | ₹1,200–₹2,000 |
The typical end-to-end timeline from document collection to Certificate of Incorporation is 7–10 working days, provided all documents are in order and the chosen company name is approved without objection.
Post-Incorporation Requirements
Incorporation is the beginning, not the end. Several filings and actions must be completed promptly after the company is incorporated:
- ✓File INC-20A (Declaration of Commencement of Business) within 180 days of incorporation - the company cannot commence business or borrow until this is filed.
- ✓Open a company current account in the company's legal name.
- ✓Apply for GST registration if the company will make taxable supplies above the threshold.
- ✓Hold the first Board Meeting within 30 days of incorporation.
- ✓Issue share certificates to subscribers within 60 days of incorporation.
- ✓Maintain statutory registers - register of members, register of directors, register of charges.
- ✓Display the company name and CIN on the registered office and all company letterheads.
INC-20A is mandatory before any business activity
A company that starts operations or borrows money before filing INC-20A faces a penalty of ₹50,000 for the company and ₹1,000 per day for each defaulting officer. File it as soon as the bank account is opened and the subscribed capital is deposited.
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