While many people want to start a company with getting into the deep understanding of the complexities that come with it. The days when you had to fill and submit multiple forms, pay an expensive fee, or even wait for several weeks to get approval are long gone. The process has become simplified now with the help of online platforms. Earlier entrepreneurs had to seek help from experts or friends or hire an agent to make a limited company. However, they are now easily taking control and making their limited company online with few simple and easy steps.
Are you wondering how to register a limited company online? Are you worried about what documents you must be needing? Dive right in to learn more about making a limited company online that too without any hassle or extra fee.
What is a private limited company?
Before you begin to understand making a limited company, it is imperative to know what it is. Setting up a company is the most popular form of starting a new venture, and most entrepreneurs now opt for a limited company. It is a limited structure privately held for small businesses. This type of company limits the owner’s liability to their shareholdings, the number of shareholders to 200, and restricts shareholders’ public trading shares. Due to this fact, a limited company is a popular choice among startups and businesses with high growth aspirations. One of the best thing with LTDs is that there are no minimum share capital requirements for LTDS, one can set up a lTD with a single share worth £1 if you want.
Both limited company and Limited Liability Partnership (LLP) offer a fixed liability structure to business owners, people often get confused between them, but they are quite different. Limited companies have a critical advantage that management and ownership are different here. While financial institutions and investors prefer it, a limited company can be an expensive business structure to maintain because of higher compliances and compulsory audit requirements.
How can you make a limited company online?
Setting up a limited company has become quite simple now with the introduction of online platforms. You can easily register a limited company online by following a straightforward procedure. If you’re wondering how to make a ltd company online, here are six easy steps you can follow:
1. Obtain a digital signature (DSC)
To make a limited company online, you need to file the forms and get a digital signature. The DSC is mandatory for all the subscribers and witnesses in the article and memorandum of association. You must obtain the digital signature certificate only from a certifying agency recognized by the government. Moreover, get the digital signature online within two days. The cost may vary based on the certifying agency.
2. Apply for the Director Identification Number (DIN)
DIN or the Director Identification Number is a unique identification number for every director. If anyone wants to become the director of a company, they need to obtain it before. One DIN allows you to become the director of any number of companies. There are two ways to apply for a DIN:
- Form DIN3
- Filling SPICe (INC-32)
3. Get a name approval
The name is the identity of a company, and you must select a name carefully. It must not only represent your business but also help you stand out from the competition. Once you have chosen a unique and relevant business name, you can get approval for the same. You can make this process easy by using the RUN web service. It is a Reserve Unique Name form that makes the procedure very easy. With this form, you only get one chance to apply.
In case the name is similar to any other company, LLP, or trademark, you will receive a rejection, and there is no second chance. Before you apply for approval, you must be sure of the proposed name and follow the availability guidelines. Since 2018, you can now send in 2 proposed names and one re-submission to reserve a Unique name for your limited company.
4. Complete the form SPICe (INC-32)
The form SPICe is a highly simplified proforma that helps incorporate a company online. With a single application, you can serve the following purposes:
- Application for DIN
- Reservation of the company name
- Including a new limited company
- Apply for PAN and TAN
Before May 2015, the registration of a company entailed filling of many different forms. You had to file DIR-3 for DIN, INC-1 for getting a name, INC-7 for registering a company with Article and Memorandum of Association, INC-22 for registering an office, and Form DIR-22 for all company directors. Now, all these forms are merged into one as SPICe (INC-32).
5. Make e-MoA and e-AoA:
While e-MoA or INC-33 stands for electronic Memorandum of Association, e-AoA or INC-34 means electronic Article of Association. These forms were introduced to simplify the process of making a limited company. Earlier, these documents needed to be filed physically, but you can fill them online with the web portal.
6. Apply for PAN and TAN
If you are applying through the SPICe form, you can also get the company’s PAN and TAN. You need to fill the forms 49A for PAN and 49B for TAN. Once you submit the SPICe form, the system will auto-generate these forms. You can download them, apply digital signatures on the forms, and upload them on the online portal. If all the information you entered is correct, the authority will choose registered office address provider and a Corporate Identity Number (CIN). You can also track it online on the portal.
What are the benefits of registering a limited company?
If you are planning to start a limited company, you can enjoy the following benefits:
1. Limited risk
The shareholders of a private limited company have limited liability. It implies that a shareholder will only be liable to pay for the company’s liabilities to the extent of their contribution made to the company. The personal assets of the shareholder are entirely safe.
2. Legal entity
A limited company is a separate entity from its owners. The company is responsible for the management of all assets and liabilities and not you.
3. Easy to raise capital
When it comes to raising capital, a majority of investors prefer giving funds to a limited company. Whether you seek funds as equity or debt from banks, non-banking financial institutions, or even angel investors, your company will be able to get funds quickly.
Companies are made after following strict procedures and under the authorities’ jurisdiction. This makes a limited company a highly secure and trustworthy business structure, preferred by entrepreneurs.
When it comes to starting a business, most people focus their time, efforts, and energy on growing the business. They fail to realize the importance of setting up a company in the right way is also very much important. If you plan to start your own limited company, it is crucial to follow the online procedure and kick-start your entrepreneurial journey. Above were few steps one need to focus while setting up a limited company.