Pvt Ltd company registration : Suitable for startups

For startups and small businesses, Pvt Ltd company registration is advised.

A Pvt Ltd company registration is the best form of company for a startup, especially one which is growth-oriented. The reasons for this are many like,

  • Usually, startups have more than one founder so it is difficult to be an OPC.
  • They also aim at getting cash from angel investors and Venture Capitalists (VC‘s) from the further issue of shares.
  • Employee stock ownership plan (ESOP) in Pvt company enables employees to hold a stake in the startup.
  • Moreover, a minimum share capital requirement of Rs 1 Lakh for incorporation has been removed.
  • The government has offered various exemptions including a tax holiday. This makes a private company form more suitable. Certain conditions are to be met by eligible startups to be entitled to a tax holiday which extends to 3 blocks out of the initial 5 years.
  • To claim eligibility, the company must be registered between April 1, 2016- 31 March, 2019, and its annual turnover must not exceed Rs 25 crore and it must have obtained a certificate of eligible business from the Inter-Ministerial Board.

If you want to apply for Private Limited Company Registration, you can go with PVT Limited Company.

The flourishing startup ecosystem seems to have boosted the growth of private companies. During the year 2015-16, as many as 60,414 private companies with an aggregate authorized capital of Rs 10,845 crore were registered (statistics are up to December 31) – a hike of 36% over the previous corresponding period as per MCA report.

Also, read the related posts:

  1. OPC/LLP/Private Limited Company – Which is good for a startup?

  2. Register Private Limited Company with the help of INC 29


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