For businessmen and entrepreneurs, a new Private Limited Company registration is arguably the most popular form of corporate entity. It’s also the most sought-after entity, especially in cases of Foreign Direct Investment (FDI). For those looking to start company registration in Mumbai, this is a crucial step.
Private Limited Company or LLP?
| Feature | Private Limited Company | LLP |
|---|---|---|
| Owners | 2 to 200 shareholders; at least 2 directors | At least 2 partners, no upper limit |
| Liability | Limited to unpaid share capital | Limited to agreed contribution |
| Equity and ESOPs | Issue shares and ESOPs; the usual choice for VC funding | No shares or ESOPs |
| Foreign investment | Automatic route in most sectors | Only in sectors open to 100% FDI under the automatic route |
| Statutory audit | Required every year | Only above ₹40 lakh turnover or ₹25 lakh contribution |
The process of company incorporation is as follows:
Notably, the applicant can complete both steps together or separately, depending on their choice.
After incorporation of a private limited company and fulfilling certain conditions, companies must file INC-20A—the additional form for commencement of business.
Immediately after incorporation, companies need to complete vital compliance tasks, outlined here.
Arguably, the toughest part in incorporating a new private limited company registration in recent times is name reservation, due to the insistence on unique prefixes. Authorities often take a narrow view of the applicability of trademarks and relevant clauses. This has led to challenges for those pursuing business registration in Mumbai and across India.
One SPICe+ application. Up to 11 government services.
The MCA’s integrated web form brings the Ministry of Corporate Affairs, the Ministry of Labour, the Department of Revenue and participating state governments into a single filing.
- Name reservation
- Incorporation
- Director Identification Number (DIN)
- PAN
- TAN
- EPFO registration
- ESIC registration
- Company bank account
- GSTINif applied for
- Professional TaxMaharashtra, Karnataka
- Shops & EstablishmentDelhi
Your first 180 days, mapped
Incorporation is the start, not the finish. These are the first statutory deadlines a new private limited company must meet.
- Day 0
Certificate of Incorporation
Issued with the company’s PAN and TAN. Your company now exists in law.
- 30
First board meeting
Within 30 days: appoint the first auditors, take directors’ disclosures (MBP-1) and choose the bank. File INC-22 if the office address was not given in SPICe+.
- 60
Share certificates
Within 60 days: issue share certificates to subscribers and pay stamp duty on them.
- 180
Commencement of business
Within 180 days: deposit the subscription money, verify the registered office and file INC-20A.
Also: the name board outside the registered office, income-tax portal set-up, and state registrations such as Professional Tax and Shops & Establishment.
Frequently Asked Questions (FAQs) – Everything you need to know
Why do companies have "Limited" in their name?
The word "Limited" signals limited liability — the owners' personal assets are protected, and their risk is capped at the amount they've invested. It's not about the company's growth potential; it's a legal marker required under the Companies Act. A private company uses "Private Limited", while a public company simply uses "Limited".
What are the main advantages of a Private Limited Company?
A Private Limited Company is a separate legal entity: it owns assets, enters into contracts and can sue or be sued in its own name, and it carries on even when its shareholders change. Shareholders’ liability is limited to the amount unpaid on their shares, so their personal assets are generally protected from the company’s debts.
Why do investors prefer a Private Limited Company?
A Private Limited Company can issue equity shares to angel and venture investors and grant ESOPs to employees, which an LLP cannot. It can also receive foreign investment under the automatic route in most sectors, subject to FEMA and sectoral conditions.
Does a Private Limited Company carry more credibility than a proprietorship or partnership?
Generally, yes. Its incorporation details, directors and annual financial statements are filed with the Ministry of Corporate Affairs, and its accounts are audited every year. That public record gives banks, large clients and investors more comfort when they assess the business.
What are the minimum requirements to register a Private Limited Company in India?
A Private Limited Company generally requires at least 2 shareholders and 2 directors, with at least one director meeting the applicable resident-director requirement. The company must also have a registered office in India and an approved name and business objects.
Should I register an LLP or Private Limited Company for my startup?
It depends on the business model and proposed ownership structure A Private Limited Company is the only feasible alternative where founders expect equity investment, multiple shareholders or institutional fundraising, while an LLP may be suitable where flexibility is more important than external funding. You can read about LLP registration here.
How long does it take to register a private limited company in Mumbai?
For most founders in India, incorporation takes around 7–15 working days once documents are ready — covering DSC, name reservation (SPICe+ Part A), and the final incorporation forms (SPICe+ Part B). The trickiest step is usually name approval, thanks to strict rules on unique prefixes, which is where expert help saves time.
Do the shareholders of a Private Limited Company have to own 50% each?
No. The shareholding can be structured differently—for example, 90:10, 70:30 or 60:40—depending on the commercial understanding between the founders. The shareholding should be deliberately structured because it affects voting rights, control, dividends and future fundraising.
Does a director have to hold shares in a Private Limited Company?
No. A director is not necessarily required to be a shareholder, subject to the applicable provisions of the Companies Act and Articles of Association of the Company.
Can an 18-year-old become a director of a Private Limited Company?
Yes. An individual who has attained the age of majority can generally be appointed as a director, provided the other eligibility and identification requirements are satisfied. Being young by itself does not prevent a person from becoming a director.
Can a 17-year-old or minor become a director of a Private Limited Company?
No. A proposed director is required to give explicit consent to be appointed as one. A 17 year old is not yet a major and hence cannot legally give consent to become a director.
Can I use my father's or family member's electricity bill for Private Limited Company registration?
Yes. You can use your father's or family member’s electricity bill as address proof for the registered office, as long as you attach a No Objection Certificate from him as the premises owner. NoC should be preferable notarized to avoid any future disputes. The bill should be recent (usually within the last two months) and match the address entered in the incorporation forms.
Can my home address be used as the registered office of a Private Limited Company?
Yes. A residential address can generally be used as the registered office, subject to appropriate proof of address and other incorporation requirements. The registered office does not necessarily have to be a commercial office.
Will I get PAN and TAN when I register a Private Limited Company?
Yes. MCA's SPICE+ process integrates PAN and TAN allocation with company incorporation. The certificate of Incorporation is issued with the PAN allotted by the Income Tax Department and PAN/TAN details are communicated to the applicant.
Can a Private Limited Company issue shares to foreign investors?
Yes, subject to applicable FEMA/FDI and Companies Act requirements, the structure should ideally be planned before incorporation if foreign investment is expected, because ownership, valuation, sectoral restrictions and documentation can affect the transaction.
Can a person with a UK director ID be a director in an Indian company?
Yes. Foreign nationals, including UK citizens, can be directors in an Indian private limited company. They'll need to obtain an Indian DIN and DSC, and their identity and address documents must be notarised and apostilled abroad. Do note that at least one director on the board must be a resident of India. You can read our International desk here.
Can a company have its registered office in Mumbai but operate from Pune?
Yes. The registered office and an operating/business location do not necessarily have to be the same. A company incorporated with its registered office in Mumbai can conduct business or maintain another office in Pune, subject to applicable registrations and local requirements.
Can one Private Limited Company carry on more than one type of business e.g. Software development and healthcare related activity?
Yes, a company can undertake multiple business activities, provided its Memorandum of Association contains appropriate objects and the activities are legally permissible. For example, a company may be structured to undertake software development as well as other related or permitted business activities. Entrecap has a proven track record in advising clients in drafting the objects thoughtfully at incorporation so you don't need to amend the MOA every time you add a new line of business.
Can an Indian Pvt Ltd or OPC sell apparel in the US or Canada through dropshipping?
Yes. An Indian private limited company or OPC can run a cross-border dropshipping business selling to US or Canadian customers. You'll typically need an Import Export Code (IEC), a compliant payment gateway, and to follow FEMA and export documentation norms. The company structure itself poses no barrier to selling apparel overseas. Read more about FEMA consultancy here.
Can a director receive a salary from a Private Limited Company?
Yes. A director can receive remuneration or salary from the company, subject to the applicable Companies Act provisions, the terms of appointment and proper accounting and tax treatment.
Which are the compliances to be done by the Company?
Where can I register a private limited company in Mumbai?
Entrecap Business Services is headquartered in Kandivali West, Mumbai making us a convenient choice for founders across Kandivali, Borivali and the western suburbs. The entire incorporation process is online, so you can register your Pvt Ltd company without leaving home, wherever in Mumbai or anywhere in India.
Do I need to visit your Kandivali office to register my company?
No. The whole company registration process is online. Founders in Borivali, Kandivali, greater Mumbai or Pune can complete everything digitally — documents are signed with a Digital Signature Certificate and filed with the MCA. That said, our Kandivali West office is always open if you'd prefer to talk things through in person.
Does Entrecap provide Private Limited Company registration services in Mumbai and Pune?
Yes. Entrecap Business Services assists entrepreneurs and businesses with Private Limited Company incorporation and related compliance requirements in Mumbai, Kandivali, Borivali, Pune and other locations across India.
How can I register a Private Limited Company in Pune?
Entrecap assists Entrepreneurs in Pune in incorporating a Private Limited Company by completing the MCA incorporation process, including name selection, preparation of incorporation documents, registered-office documentation, SPICe+ filing process and the post incorporation compliance.