Five Points you must know before starting a Private Limited Company

March 19, 2020

The Primary information which should be known to the individual before choosing a Private Limited Company as a business entity is summed up in five points as under. The decision of choosing the right entity will impact the long-term growth of the business. Private Limited Company is having a dozen benefits hence day by day the government is witnessing the increase in a number of registrations as a Private Limited Company.

Before starting a process, knowing the basics of the entity will serve the purpose rightly.

Minimum Requirements

Before establishing a Private Limited Company, one must be aware of its minimum requirements, as it may happen that one must have done long term planning but unaware about its basic requirements, thus falling into a criteria is very important , with the pace of time the government also come up with many new formalities and amend its requirements by time to time to promote ease of doing business.

Documents required

Documentation should be always done in advance to complete the process with ease, the only option to save the government processing time is proper documentation. Not only that, valid and legible documents are also required.


One of the most important aspect of choosing any entity is its taxation, thus as a businessman, one should look for an entity that is best suitable after looking into consideration the taxation aspect.

Burden of tax always slow down the progress of the business, hence the government also comes out with attractive exemptions to promote the Private Limited Company which also leads to ease of doing business.

Yearly compliances

What after Incorporation? Are you ready for the post compliances?

One may not be aware of the compliance that is required after incorporation; thus, the compliance cycle should be kept in mind.

The yearly compliance includes MCA compliance, tax returns, GST returns if any, other authority specific compliances. The Directors are liable to make sure that the Company is well compliant. The complaint Company will always attract investors and venture capitalists.

The dealers and vendors also look for a compliant entity to get an assurance on the deal.

Costing required to maintain the Company

The Company once incorporated has to comply with timely compliances, be it annual or eventual, the costing of compliance also depends on many factors like the Authorized Capital, the state in which it is registered, the number of directors.

One may bear the incorporation cost, but may not be able to bear the yearly compliance cost,  

Hence before planning to incorporate a company, one should keep in mind the total cost that is required on a frequent basis.

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