Karnataka is the hub of the manufacturer, textile, food processing, automobile, and heavy machinery. Karnataka is the epicenter of research and innovation it has 400 research and development centers. Karnataka is also a leading exporter of merchandise in India. Karnataka contributes almost 5% of the total export of India which is equivalent to 17.4 billion US dollars. It also has Pavagada solar park with a capacity of 2000 megawatt electricity. Biggest solar park in the world. And world bank ranked Karnataka 17^th  out of 36^th cities in the world for ease of doing business. So if you are planning to do a business or setup a business in Karnataka you should learn how to get private limited company registration in Karnataka. Here is complete information about the process and steps you need to follow while registering your private limited company in Karnataka.

What is private limited company?

You must be wondering what a private limited company is? So, here are important or vital information about private limited company.

1 . A private limited company has a minimum of 2 or a maximum of 200 members in the company.

2. A private limited company has limited liability upon the member and shareholders of the company which means in case of insolvency, bankruptcy and dissolution of the company the shareholders and directors shall be liable only for selling off their company’s assets they shall not be liable for their personal assets such as a house, properties, and personal belongings under companies Act 2013.

3. A private limited company can be established with less amount of capital which is 1,00,000 rupees.

4. A private limited company requires only two boards of directors to start a company.

5. The name of any private limited company shall always end with private limited.

Advantages of private limited company registration in Karnataka

1. Separate legal entity or independent entity-

Once a private limited company has been registered it becomes a separate or independent body or entity from its shareholders, members, board of directors. Which means in case of any miss-happening or death of any member, shareholder would not affect and the company’s functioning will run without any trouble.

2. Make easy to raise capital

After being registered under companies Act 2013. It becomes very easy for company to raise funds or capital from the investors or any other body. Company Registration makes investors or other bodies to trust on the company since it has been gone through a long process by the Government for registration.

3. Secure investors liability

A private limited company after registration makes invertors to feel secure because a limited company has limited liability upon the shareholders and the members of the company.  So in case of insolvency, bankruptcy. The personal belonging of the investors shall be untouched according to companies Act 2013^[1].

4. Dissolution

Registration of private limited company makes private limited company run in a well-mannered way. But its also help to dissolve the company with as ease as it makes them to run.

Reason for not qualifying for registration in Karnataka

1. Differ name in PAN

This is a common mistake. Often it has seen that the name in PAN and Aadhaar or other documents of the company is differ from the name mentioned in PAN. So before going for registration double-check your documents and PAN.

2. Non objection certificate from owner

Non-objection certificate (NOC) from the owner or owners of the company or land should be present at the time of registration. NOC is mandatory cause it shows that the owner or owners do not have any issue with the terms and conditions of the company functioning and he/she is giving complete consent for the same.

3. Identical name of the company

• At the time of registration if the company name is identical to any other existing companies. Then in this case registration shall be denied. So, one should choose their company name wisely.
• The name should be meaningful to the company. And it should represent the company works because it will be associated with the company forever. 

Mandatory documents required from Individuals to  become board of directors and shareholders

1. PAN Card

2. Identification proof issued by Government – Aadhaar, or  Voters’ ID or passport or driver’s license

3. Six months Bank statement with current address

4. Utility bills either gas or mobile  or electricity with current address

5. Current  Passport size photo.

6. Signatures of the director on the blank paper.

Mandatory documents required from Individuals to become the Directors and shareholders (NRIs)

• PAN Card
• Identification proof issued by Government – Aadhaar, Voters’ ID or passport or driver’s license
• Six months Bank statement with current address
• Utility bills either gas or mobile or electricity with current address
• Current Passport size photo.
• signatures of the directors on the blank paper.

The essential requirements for registration in Karnataka

1. Minimum of 2 shareholders should be there in the company.

2. Minimum of 2 directors should be there in the company

3. DIN ( directors identification number ) for all the concerned directors

4 The Minimum share capital is worth Rupees. 1,00,000. lakh.

5. There should be at least one member in the company should be from India.

Step by step procedure for registration of private limited company in Karnataka

STEP 1 : Application of DSC and DPIN

DIN for 2 Directors

Director Identification Number (DIN is the registration of Directors with the Registrar of Companies. PAN or Aadhaar is the mandatory document for the registration of directors in the company in Karnataka.

DSC for 2 Directors 

Digital Signature Certificate (DSC) are the signatures of the director that allow signing any document in the digital form. To file any vital documents on behalf of any private limited company everyone needs to sign digitally by using DSC. Directors can also skip DIN and DSC step if they have already done DIN and DSC. 

STEP 2 : Filing of Name for the Private Limited Company in Bangalore, Karnataka

In step two one should send three options to be the name of the company to the ministry of corporate affairs ( MCA). And out of three options one shall be chosen by MCA but one should choose all three options wisely and make sure all of them should be unique from any other registered company.

STEP 3 : The submission of MOA & AOA

After the name is approved by MCA, the next step is to write the “Memorandum of Association” and the “Articles of Association” of the company. And they will be filed with the ( MCA) and the  (DSC).

Memorandum of Association

Memorandum of Association (MoA), it defines the important relationship with shareholders and the main objectives along with other objectives for which the company has been formed. Any private limited company can undertake only those activities as mentioned in the object clause of in the Memorandum of Association.

Articles of Association

Article of Association ( AoA ) specifies the rules and regulations on basis of which the company will be managed. It not only lay down the duties, rights it also give powers to the management that will manage the company. 

Step 4 : Apply for forming a Private Limited Company in  Karnataka

In step 4 the members of the company need to apply for registration of private limited company within 20 days once the name is approved in step 2. Memorandum and article of association need to be submitted along with the required forms. Also, MOA and AOA shall be signed by all the members along with the details like father’s name, occupation, address, and the number of shareholders. 

STEP 5 : Receiving the Incorporation Certificate of Private Limited Company

Normally, it shall take 3-5 days to form a private limited company in Karnataka after submitting all the requirements. The certificate of Incorporation shall be issued by the Government of India. 

Conclusion

The requirements and procedure for registration of private limited company in Karnataka may differ from other states of India. When any confusion arises in this regard of registration one should consult an expert to resolve the queries. Feel free to reach expert at bizadvisors.io for registration of the private company.

Read our article:Do you want to start a business: know how?