As now you are sure what legal entity suits you best and finally you opted for a private limited company,
now its time to understand what one must keep in mind while proceeding with private limited company registration.
Choose Name Wisely
• Name shall be in accordance to Central Government rules and regulations.
• It should not be similar to any of the already registered or existing Trade Mark or Conflicting to any Trade Mark.
• It must not attract the provision of Emblems and Names Act 1950.
• It has been noticed that Central Government issue notice after allotment of name in case of any dispute or conflict and accordingly name has to be changed (This is known as Compulsory Change).
Choose Address Wisely
• Address means registered office or place which is very important part of company incorporation; it’s the address where all documents, financial statements have to be kept.
• Always choose address as per your vision and Comfort. As it will also impact you in terms of applicable taxes and liabilities (specific to state )
• It is very difficult to change registered office specially in case where change is from one State to another State and it costs more than company incorporation itself.
Equity Shares Or Preference Shares
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• Equity Shares are those which are not preference Shares.
• Equity Share holders gets Voting Right.
• Equity shares gets share in profit of company.
• Equity shares repaid at end in case of winding up, if reserves available.
• Preference Shares are also part of share Capital.
• Preference Shareholders do not get Voting Rights, but they can participate if there rights get affected.
• Preference shares gets dividend in share of profit as per Percentage or fixed scale specified in Memorandum of Association.
• Preference Shares Paid before Equity Shares in case of winding up, if reserves available.
Authorized Capital & Paid Up Capital
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• It is the amount specified in Memorandum of Association.
• This is the maximum amount which can be raised by company through issuing equity shares.
• It is beneficial for them to register company with authorized capital of Rs.5,00,000.00 by paying a nominal amount more than what they pay in registration of company authorized capital of Rs.1,00,000/-
Paid Up Capital
• It is the total amount which is called up by the company or shares issued. In simple words, an amount which is paid by shareholder to company for taking shares.
• It cannot be more than authorized capital
Company Limited By Shares or Guarantee or Unlimited Company
• Personal liabilities of shareholders are limited, up to the amount of unpaid shares, if company is limited by shares.
• Personal liability of shareholders is limited, to the amount guaranteed if it is company limited by guarantee.
• Personal liability of shareholders is unlimited if it is unlimited company.
• It contains main object of business with ancillary object i.e. (Supporting business of main business). For example: if an education institution main object is to provide education& they provide hostel facility to students become its ancillary business.
• It also contain other object of company, For example: Other sources for generation of revenue like rental income, interest income etc. , Running Social Awareness Camp etc.
• One must go through to their object clauses well so that you may not miss any of your business objectives