The Directors have the option to choose to register for GST at the same time as incorporation throughout the company registration process. However, unless specific turnover thresholds are met, a corporation is not required to be registered under the GST. In this comprehensive guide to GST registration in India, you can learn more about the turnover threshold and the procedure for applying for GST registration.
For a Private Limited Company, a bank account
Within 180 days of the company’s incorporation, a bank current account in its name must be opened, and the subscription money must be deposited. The commencement of business certificate would not be issued and a fine would be applied if the aforementioned procedures were not followed.
In order to open a bank account for a private limited company, the following documents are needed:
Board of Directors resolution authorizing the directors to open a bank account Incorporation Certificate of the Company Directors KYC Documents Address Verification of the Company
IndiaFilings collaborates with a number of institutions to facilitate the seamless opening of current accounts for our clients’ businesses.
Private Limited Company Benefits
The main benefits of forming a private limited company in India as opposed to other entity kinds are as follows.
Distinct legal entity
A company is a juristic person as well as a legal entity. As a result, a business enjoys a wide range of legal rights, including the ability to buy land, take on debt, employ people, etc. A corporation’s members (shareholders or directors) are not held personally accountable for the company’s obligations because a company is a distinct legal entity.
A private limited company is a distinct legal entity with restrictions on liability. As a result, the shareholders are not responsible for the company’s losses in excess of the amount they contributed as share capital.
Perpetual succession refers to a company’s ability to remain indefinitely without being formally dissolved. A company continues to exist regardless of membership changes because it is a separate legal entity and is unaffected by the death or other departure of any of its members.
A private limited business has a variety of funding alternatives. A business can raise money from investors, shareholders, angel investors, venture capitalists, private equity funds, foreign funds, non-bank financial companies (NBFCs), banks, and other financial organizations. Investors can only provide debt and equity funds to a corporation.
Private Limited Company Drawbacks
Even while creating a corporation has many benefits, it may not be the best choice for all business owners for the following reasons:
Compliances Regardless of commercial activity or turnover, a corporation is required to maintain a number of compliances. As a result, running a business requires a minimum recurring expense every year.
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