The process for the incorporation of all types of the Company has been made 100% online. It is governed by the MCA (Ministry of Corporate Affairs) and regulated by the Companies Act, 2013 and the Companies Incorporation Rules, 2014.

Advantages:
Capital: Whatever amount the founder members deposit from their OWN POCKET is called CAPITAL. It could be the amount that you need to start the business. There’s no minimum or maximum limit onto this but generally, people start their business with capital if Rs.1 lakh reason being earlier, the shareholders had to pay a minimum of ₹ 1 lakh as a subscription amount to incorporate a private limited company. Now, there is no such requirement. So, if your business doesn’t need this much or if you are getting funded from an outside source then you can even choose to keep lesser amount as your capital – Rs.10,000 or even Rs.1000.

Name: Technically this a first point that you focus on while Incorporating a company. The name you select for your business entity is not just a Business name but an Identity of your Company. Thus make sure you choose a Name that is catchy, unique and never heard of. It could be the Brand name by which your business (product or service) will be recognised by many, thus make sure it does not sounds similar to any other business entity or product name.

Perpetual Succession: Since a Company is a separate Legal entity, in the eyes of law the company keeps on existing even in the case of death, insolvency or bankruptcy of any of its members.

Separate Legal Entity: The members i.e. Shareholders/Directors of a Private Limited Company have no liability to the creditors of a company for such debts. Hence, a Private Limited Company is a legal entity separate from that of its members. It can have a PAN number, bank accounts, licenses, approvals, contracts, assets and liabilities in its unique name.

Limited Liability: In private limited Company, the liability of the members is limited to the extent of the face value of shares taken up by them. Whereas in proprietorships and partnerships and any other unregistered forms of business, there liability is unlimited.

Easy Transferability: As the ownership of a company is represented by shares, the ownership of a company can be transferred to any other legal entity or person in India or abroad easily – in part or whole. The directors can also be replaced to ensure business continuity.

Funding: A company can raise equity capital from persons or entities interested in becoming a shareholder. Entrepreneurs can raise money from angel investors, venture capital firms, private equity firms and hedge funds.

• If a company is having an adequate profit then it can pay to its managing director or whole time manager remuneration up to 200% of the above mentioned managerial remuneration if shareholders have given their approval through a special resolution.
• A managerial director who is not holding share up to Rs. 5 lakhs or more and director of the company is not related to any promoter during the period of two years prior to his appointment as a managerial person, so in this case, the company may pay to him 2.5% of the current relevant profits and up to 5% with the approval of shareholders by a special resolution.
• Current relevant profit is the profit calculated under section 198 and under this there is no deduction of an excess of expenditure over income as prescribed in section 4(1). It is relating to all usual working charges in respect of those years during which the managerial person was not an employee, director or shareholder of the company or its holding and subsidiary companies.
• While computing of the ceiling on remuneration specified in section II and section III, following are the perquisites which shall not be included:
  • PF or superannuation fund or annuity fund are not taxable under the Income-tax Act, 1961 (43 of 1961).
  • Gratuity shall not be exceeding half a month’s salary for each year of service
  • Encashment of leave at the end of the tenure.