Starting a business is a significant milestone in an entrepreneur's journey, and choosing the right legal structure is the first critical decision that impacts compliance, taxation, investment readiness, and future scalability. In India, a Private Limited Company (Pvt Ltd) is one of the most preferred legal entities for startups and growth-oriented businesses. However, before initiating the incorporation process, it is essential to understand the complete set of start-up requirements for a private limited company in India. These requirements span legal eligibility, documentation, digital procedures, and compliance mandates.
This comprehensive guide elaborates on every requirement a founder needs to meet before registering a Pvt Ltd company.
Every private limited company must have at least two directors and two shareholders at the time of incorporation. A single individual cannot register a private limited company unlike a One Person Company (OPC). However, the same individuals can act as both directors and shareholders.
Additionally, the Companies Act requires that at least one director must be a resident of India, meaning they should have spent a minimum of 182 days in India in the previous financial year. This rule ensures that there is at least one Indian national accountable for the company's statutory obligations.
The maximum permissible number of directors is 15, although this can be increased with shareholder approval. For shareholders, a private limited company can have up to 200 members, and it cannot invite the public to subscribe to shares, which is a key feature distinguishing it from public companies.
The registration process for a private limited company in India is entirely online and administered through the Ministry of Corporate Affairs (MCA) portal. As such, every proposed director must first obtain a Digital Signature Certificate (DSC) from a Certifying Authority (CA) authorized by the Controller of Certifying Authorities in India.
A DSC serves as an encrypted digital identity that allows individuals to sign electronic documents with legal validity. Without a DSC, the applicant cannot proceed with any part of the registration, making it a mandatory prerequisite.
Documents required to obtain a DSC generally include a passport-sized photo, PAN card, Aadhaar card, and a valid email ID and mobile number.
Alongside the DSC, every director must also possess a Director Identification Number (DIN). This unique 8-digit number is issued by the MCA to keep track of an individual’s directorships across companies.
Fortunately, the process of obtaining a DIN has been streamlined. You can now apply for DIN directly through the SPICe+ Part B form during the incorporation process. Previously, this had to be done separately, but now it saves time and effort.
Selecting a company name that complies with the MCA guidelines is a crucial and strategic step. The name must be unique, meaningful, and not resemble any existing registered company, LLP, or trademark.
There are two ways to apply for name approval:
Reserve Unique Name (RUN): This allows you to propose two names for approval without proceeding with full incorporation.
SPICe+ Part A: Name reservation can be done directly as part of the incorporation form.
The company name must end with the words “Private Limited” and reflect the proposed activity or brand identity. Conducting a prior search on MCA and trademark databases is highly recommended.
At the time of incorporation, the company must provide a valid registered office address in India, which will serve as the official communication address with the Registrar of Companies (ROC).
This address may be residential or commercial. However, proof of address is mandatory, which includes:
A recent utility bill (not older than 2 months)
A No Objection Certificate (NOC) from the property owner (if rented)
A rental agreement or ownership document
This address must be accessible for inspection, and any change in address must later be updated with the ROC via Form INC-22.
Although the Companies Act has done away with minimum capital requirements, the company must declare its Authorized Capital and Paid-Up Capital during incorporation.
Authorized Capital is the maximum amount of share capital the company is authorized to issue.
Paid-Up Capital is the actual amount invested by shareholders at the time of incorporation.
Most companies declare a nominal amount such as INR 1,00,000 as authorized capital, which can be increased later as needed.
Once the company is incorporated, the paid-up capital must be deposited into the company’s bank account, and a declaration must be filed via Form INC-20A within 180 days.
Two foundational documents that govern a private limited company are:
Memorandum of Association (MOA): Outlines the company's objectives and scope of operations.
Articles of Association (AOA): Defines internal rules, management structure, director powers, and procedures.
These documents must be filed in digital format as e-MOA and e-AOA while submitting the SPICe+ Part B form. Any errors or inconsistencies in these documents can delay approval.
The MCA has introduced the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form, which consolidates multiple services into one integrated application.
SPICe+ is divided into two parts:
Part A: Name reservation
Part B: Incorporation, DIN allotment, PAN/TAN, EPFO, ESIC, GST registration, and bank account opening
All required documents ID/address proofs, MOA, AOA, NOC, declarations, and professional certification must be uploaded and digitally signed. The form is then submitted via the MCA portal for review and approval.
Once approved, the ROC issues a Certificate of Incorporation (COI) along with PAN and TAN numbers.
Following incorporation, the next step is to open a current account in the name of the company with a scheduled bank. The paid-up share capital should be deposited into this account by the subscribers.
Once the capital is deposited, the company must file Form INC-20A, which is a declaration of commencement of business. This form must be submitted within 180 days of incorporation, and failure to comply may lead to penalties or even the company being marked for strike-off.
As per Section 139 of the Companies Act, 2013, the Board of Directors must appoint a Statutory Auditor within 30 days from the date of incorporation.
This appointment must be filed with the ROC using Form ADT-1. The auditor will review the company’s financial records and prepare the audit report at the end of the financial year.
Even if there is no business activity or revenue in the first year, the audit remains mandatory.
Depending on your business model and state of operation, you may also need the following:
GST Registration: Required if turnover exceeds INR 40 lakh (INR 20 lakh for services) or for inter-state trade.
Professional Tax Registration: Mandatory in some states like Maharashtra.
Startup India Registration: DPIIT recognition for tax exemptions, funding support, and regulatory benefits.
MSME, FSSAI, IEC: If your company deals in manufacturing, food, or exports.
Some of these can be selected as part of SPICe+, while others must be applied for post-incorporation.
Incorporating a private limited company in India is a structured yet intricate process that involves multiple statutory requirements. From identifying eligible directors and drafting foundational documents to filing digital forms and appointing an auditor, every step has legal implications.
By fulfilling all start-up requirements early, you ensure that your company stands on a strong legal and compliance foundation. For first-time founders, seeking help from professionals like Chartered Accountants and Company Secretaries can significantly simplify the process, prevent delays, and ensure smooth registration.
If you're ready to build a registered, compliant, and scalable business, understanding these start-up requirements is your first step toward entrepreneurial success.
A minimum of two directors is required. At least one must be a resident of India.
There is no minimum capital requirement. You can start with any amount, though INR 1 lakh is commonly declared.
Yes, you must provide a valid registered office address in India during incorporation with proof like utility bills and an NOC.
PAN card, Aadhaar, passport-size photo, mobile number, and email ID are typically required.
SPICe+ is an integrated MCA form for name reservation, incorporation, DIN, PAN/TAN, EPFO, ESIC, GST registration, and bank account opening.