Indian Private Limited Company stands as a separate legal entity. This brings a lot of benefits, for example, the company can operate as a proper corporate house as there are shares and not ownerships. Perpetual succession is another reason to open a private limited company, i.e., even if something happens to a shareholder, the share can be transferred to their successor, meaning that the business process will continue.
In India, Private Limited Companies have even more significance, as foreigners can only open a private limited firm if they want to start fresh. Additionally, according to a leading CSP in the country, 3E Accounting India, most of the government incentives support private limited companies, so there is an increasing trend of registering businesses as the same.
What are the Requirements for Opening a Private LImited Company?
You need these things to register a company as a private limited firm in India.
- A registered office address. It should be a physical location and not just a PO Box number.
- At least two directors are needed during the time of incorporation. Furthermore, one of them must be an Indian Resident.
- There have to be at least two shareholders. The maximum number of shareholders in a Indian PVT Ltd. company is 200. A shareholder can be a natural person or a corporate entity.
- For foreigners, 100% foreign ownership is available in select sectors. You may need to talk to your business advisor or India company incorporation services to know about the availability of FDI in your field.
What is the Minimum Investment for an Indian Private Limited Company?
There isn’t minimum paid up capital. However, the minimum share capital is Rs. 1,00,000.
Remember, for foreign investors, even if the minimum investment is not a factor, they need to prove that they have a viable idea and the funds to give the idea a life. Local empowerment, i.e., use of Indian local resources and employment opportunities for the locals is going to increase your chances of being accepted.