Overview of Private Limited Company registration in Visakhapatnam, Andhra Pradesh
Starting a business of your own could be an exciting as well as a nerve-wracking situation for you, after all, it’s a big responsibility. However, at the same time, it is highly recommended for you pick a business structure that could allow you maximum benefits and save your energy to focus on growing your business. Therefore, for someone who believes in starting small & make their way upward is one of the highly recommended ways to start a private limited in India.
A private limited company registered in Visakhapatnam, Andhra Pradesh is a popular business structure that is especially relevant for smaller companies & start-ups who are with higher risk and growth aspirations. It comes with multifarious benefits like limited liability, separate legal existence, better credibility, and ease in raising external funds. Unlike a partnership firm or an LLP, the day-to-day affairs of a company are managed by the directors of the Private Limited Company.
Definition of Private Limited Company in Visakhapatnam, Andhra Pradesh
Section 2(68) of the Companies Act 2013 describes, a Private Company as a company that-
- Places a restriction in its articles of association regarding the transfer of shares.
- Limits the total number of members to up to two hundred.
Therefore, in the case of a private limited company, the number of total shareholders cannot be more than 200 at a time, and the transfer of shares is restricted to be traded among the public in general. Therefore, a private limited company is essentially suitable for smaller companies.
Private Limited Company registration in Andhra Pradesh
Andhra Pradesh is located in the southeastern coastal region of India, and it is the tenth most populous state and seventh-largest state by area in India. It is bordered by Chhattisgarh, Karnataka, Odisha, Tamil Nadu, Telangana & The Bay of Bengal. The state was formed on 01 October 1953, and it is the first state whose formation was based on language. In June 2014, Andhra Pradesh went through reorganization for administrative purposes, and Telangana was carved out from Andhra Pradesh.
Capital– Amaravati
The economy of Andhra Pradesh
The economy of Andhra Pradesh is mainly based on the primary sector. The economy of Andhra Pradesh is primarily based on agriculture and livestock. Andhra Pradesh mainly consists of three agricultural economic zones – the first is the Chittoor district for mango pulp and vegetables, the second is the Krishna district for mangoes, and lastly, the Guntur district is for chillies.
Rice is the primary crop of the state. Andhra Pradesh is known as the ”Rice bowl of India’ as it is a significant exporter of Rice. Besides agriculture, livestock and poultry are the other two profit-yielding businesses in Andhra Pradesh. It is also called the ”Egg bowl of Asia’ as it is the largest producer of eggs in the country.
Infrastructure and Industries in Andhra Pradesh
Talking about the state’s infrastructure it is highly focused on developing a world-class infrastructure. The State Government is widening the state’s highways; besides, National Highway 16 also passes through the state. Currently, under the Andhra Pradesh State Fiber Net Limited (APSFL) initiative, the Government is trying to set up an optical fiber network to connect the thirteen districts of the state.
The primary industrial sector in Andhra Pradesh is Pharmaceutical, textiles, and automobiles. By improving its infrastructure and connectivity, Andhra Pradesh is also emerging in biotechnology and information technology.
Resources in Andhra Pradesh
Andhra Pradesh has varied geological formations that contain a rich variety of industrial minerals and building stones. The rich and diverse industrial minerals and building stones make Andhra Pradesh one of India’s storehouses of mineral resources.
How can mining affect the fate of Andhra Pradesh?
Mining is expected to be the overall infrastructure and industrial development growth engine. The Tummalapalle Uranium Mine in Andhra is reported to have 49,000 tonnes of ore, and the state is estimated to hold reserves totalling three times its current size. Andhra Pradesh has metal-grade bauxite deposits, gas reserves, etc., that are expected to provide rapid economic growth. So currently, mining is expected to affect the fate of Andhra Pradesh.
Top business ideas in Andhra Pradesh
The Government of Andhra Pradesh has implemented various reforms in the business sector and has been ranked the No. 01 state on ease of doing business for consecutively two years (2016-17). Here are some business startup ideas that one can try in Andhra Pradesh.
Horticulture
Andhra Pradesh is the top producer of papaya tomato, chilies, oil palm, lime, cocoa, and the second leading producer of turmeric sweet orange, mango, and cashew in India. The recent increase in demand for organic food makes Andhra Pradesh suitable for horticulture. You will get ample resources for starting a horticulture business in Andhra Pradesh.
Eco-Tourism
Andhra Pradesh has a wide forest cover that makes it perfect for eco-tourism. The state is close to nature and offers exotic natural views that attract many people. Beautiful views and greenery make Andhra Pradesh suitable for eco-tourism.
Sericulture
Being the second-largest producer of silk Andhra Pradesh is perfect for sericulture. The sericulture business has a wide scope in Andhra Pradesh. If you plan to start a sericulture business, you can develop it as a local business idea.
Fisheries
Andhra Pradesh is the top fish and shrimp producer in India, and the Fisheries employ more than 14.5 lakhs people. The Government provides power tariff concessions to around 53,500 aquaculture farmers. That’s why Andhra Pradesh stands first in the Aquaculture area and production. Besides this, the state government provides many subsidized resources for the maintenance and care of fish. Fisheries business in Andhra Pradesh is undoubtedly one of the beneficiary business ideas. If you plan to start a fisheries business in Andhra Pradesh, you will also receive a power supply at a subsidized power rate from the state government. Above all, you will be able to take advantage of all the schemes and policies of the Andhra Pradesh Government made for the promotion of fisheries and aquaculture.
Neem Oil Extraction
Another significant business idea in Andhra Pradesh is Neem oil extraction. Andhra Pradesh is naturally suitable for the fast growth of Neem trees. That’s why the neem oil extraction business or other businesses related to neem has a vast scope in Andhra Pradesh. Neem is of major importance in the skincare and beauty industry, so neem oil extraction and other businesses related to neem will surely yield huge profits.
Poultry Farming
Andhra Pradesh is mainly based on Primary sector activities, and it is among the states that promote the animal husbandry sector. The poultry farming business in Andhra Pradesh immensely depends on milk, meat, and egg, and Andhra Pradesh has a broad scope in poultry farming and other related businesses.
Textile business
Andhra Pradesh is the second-largest cotton and silk fabric producer in India. Textile business in Andhra Pradesh is very prospering and has a wide scope. The skilled artisans and experts required to produce cotton and silk garment and fabric are locally available in Andhra Pradesh. With the help of local artisans and readily available raw material, one can easily set up a small-scale textile business in Andhra Pradesh.
Forest resource supplier
Andhra Pradesh has a wide forest cover, making it a rich source of forest-related resources. The craze for forest resources is increasing day by day in the country. The forest resources, including beedi leaves, nuts, bamboo, neelavema, tamarind, rosewood, etc., are immensely demanded. So, the forest resource supplier business will not take you to loss.
Startup Ecosystem in Andhra Pradesh
Anudeep Chappa, the associate director of Tie Amravati, has stated that the talent pool has been moving out of Andhra Pradesh to other places like Bengaluru or Hyderabad. The movement is taking place immediately after graduation. Anudeep Chappa observed a similar trend in startups also and predicted that it could immensely affect the startup ecosystem of Andhra Pradesh. Earlier, Andhra Pradesh used to house the IT hub of the country, but after the formation of Telangana, the state had to suffer significant setbacks.
How is Andhra Pradesh Government boosting the startup growth of the state?
Andhra Pradesh has made slow but steady development in building a startup ecosystem. The Government has taken a lot of initiatives and built schemes to attract the talent pool and startups. The state government is taking active measures to promote the rise of the tech economy.
The Government of Andhra Pradesh has set up incubators and accelerators to support startup growth. Besides this, the Government is trying to help startups grow by aiding the innovation fund of INR 100 crores. Along with this, the state government of Andhra Pradesh provides performance-linked assistance of over 12 thousand Indian rupees per month for startups and more.
What is ”Make in AP?”
Make in AP is a state-government established platform for startups. With the help of the Make in AP (Andhra Pradesh) initiative, young professionals and entrepreneurs can interact with mentors and corporates to develop their businesses. Through the Make in AP initiative, the Government provides adequate support to startups by providing cash prizes, incubation, mentoring, etc.
Salient Features of a Private Limited Company registered in Visakhapatnam, Andhra Pradesh
Upper Ceiling for Members
The Companies Act 2013 provides that in order to incorporate a Private Limited Company there must be at least two members who shall subscribe their names to the MOA of the company, while the maximum number of members cannot go beyond 200.
Number of directors
Again, as per the Act 2013, it shall be compulsory for every Private Limited Company to have at least two directors out of which one should be a resident director i.e. who resides for at least 182 days in India in the previous year.
Body Corporate
A Private Limited Company is a body corporate having a separate legal status in the eyes of the law, which enjoys limited liability for its members, perpetual succession & separate property from its members. Limited Liability, which means that whenever the company is insolvent or facing losses, the members of the company shall not be liable to pay beyond their agreed amount of contribution.
Unique Name & Suffix‘
Every proposed Private Limited Company must have a unique name that signifies the object or nature of the business. Further, it shall be compulsory for every Private Limited Company to add the suffix ‘private limited’ after its name in every official letter and publication.
Index of members
Since the number of members in a Private Limited Company is limited, a Private Limited Company doesn’t necessarily need to maintain an index of its members as per the Act.
Eligibility Criteria for Private Limited Company Registration in Visakhapatnam, Andhra Pradesh
i. Minimum amount of shareholders & directors- For the purpose of starting a private limited company, there must be at least two members who subscribe to the Memorandum of Association of the company and at least two directors on its board. There cannot be more than 200 members in a Private Limited Company.
ii. Resident Director- The another requirement to incorporate a Private Limited Company in India is out of the minimum of two directors in the company, there must be at least one director who is a resident of India in the previous financial year, which means that such director must have resided for at least 182 days during the immediately preceding year irrespective of their citizenship. Such a director shall be primarily responsible for managing applicable compliances on time.
iii. Registered Office Address- As per the Companies Act 2013, every company should have a registered office within a period of 30 days from the date of incorporation for all official communication purposes, for which a proof of address must be produced within such time to the MCA. Further, within a period of 30 days, the company needs to have a registered office address and proof of address must be submitted online.
iv. Legal Object- The proposed Private Limited Company shall only be incorporated for legal purposes and not with an aim to pose any threat or misuse or harm the society. The legal object of the proposed company should be expressed clearly in the object clause of the drafted Memorandum of Association (MOA) of the company.
v. DIN for all Directors- As provided under sections 153 and 154 of the Companies Act, 2013, it is compulsory for every individual who wishes to become a director to hold a unique Director Identification Number or DIN, which could either be made by filling form DIR-3 or along with the incorporation form SPICe+ with MCA.
vi. Digital Signature Certificate (DSC)- As the whole process of registration has been made completely online, the directors of the proposed company must verify the genuineness of the documents by signing them digitally. For this, they are required to acquire a Digital Signature Certificate from any government-approved certifying authority, a list of which is available on the MCA portal.
vii. Certificate of Compliance- Further, the proposed company shall also be required to submit a certificate of compliance from a professional such as a CA/CS/CMA, signifying that all the requirements related to incorporation have been genuinely fulfilled.
Benefits of incorporating a Private Limited Company in Visakhapatnam, Andhra Pradesh
Limited Liability of Shareholders
Unlike a sole proprietorship firm or a partnership firm, a Private Limited Company offers the benefit of liability to its members. In simple words, the debts and assets of a company are separate from its members, thus in the event, the company goes through losses or debts, the personal assets of the members are protected from such debts and could only be responsible till their agreed amount of contribution.
Separate Legal Existence
A Private Limited Company enjoys a separate legal status that can hold its own assets or liabilities, enter into contracts or sue them, and even has perpetual existence that will continue to live despite any death or disability of its members.
Clear Distinction between Management and Ownership
In a Private Limited Company, there is a clear distinction between management & ownership of the company. Since the day-to-day affairs are handled by the management, the directors are responsible for its functioning, while the ownership of the business is vested in the shareholders which prevents clashes & promote growth.
Ease in Raising Funds
Holding a highly legally business structure, banks & financial institutions prefer to issue loans to Companies as they come with benefits such as ease in transfer of ownership & limited liability to its members. VC firms, angel investors, & HNIs consider it safer to invest in a private limited company than any other business entity.
Credibility
Companies incorporated with the Registrar of Companies (ROC) under the Companies Act 2013, are subject to periodical compliances and even submit a copy of financial statements & annual returns providing a clear picture of the affairs of the company.
Process of Private Limited Company Registration in Visakhapatnam, Andhra Pradesh
Step 1-Apply & Obtain Digital Signature Certificate in Visakhapatnam, Andhra Pradesh
As a first step, the applicant company needs to apply for a Class 3 category digital signature certificate from a government-recognized certifying authority, the list of the government-approved authorities provided in the portal of the Ministry of Corporate Affairs. Having a DSC is compulsory because it enables the applicant company to sign & e-verify its documents & attachments online.
Step 2-Application for the Allotment of the Director Identification Number in Visakhapatnam, Andhra Pradesh
For the purposes of incorporation of a Private Limited Company in Visakhapatnam, Andhra Pradesh, at least two directors must possess a DIN. A DIN could be applied in two ways-
i. File e-form DIR-3 for the allotment of DIN in Visakhapatnam, Andhra Pradesh
For a director who wishes to become a director in an existing company can make an application for allotment of DIN in e-form DIR -3 from the MCA portal. The applicant director will be required to attach certain documents like proof of identification such as PAN, Aadhaar Card, etc, & proof of residence.
ii. Apply for DIN through the incorporation form SPICe+ in Visakhapatnam, Andhra Pradesh
With the effect of a notification that arrived on 23.02.2020, in the case of a new Private Limited Company, DIN could be applied to up to three directors along with the incorporation form SPICe+ form.
Step 3-File & Submit the form for Incorporation on the MCA portal in Visakhapatnam, Andhra Pradesh
Launched in the year 2020, the SPICe+ is a web-based integrated company incorporation form that has been launched as a result of joint efforts of 3 Central Govt Ministries & Departments. (Ministry of Corporate Affairs, Ministry of Labour & Department of Revenue in the Ministry of Finance) and One State Government (Maharashtra), with an intent to promote ‘Ease of Doing Business.
It comes in two parts –Part A & Part B, which offer 10 services thereby saving time, energy & costs and easing the process of registration.
Part A of the SPICe+ includes – Reservation of Unique Name (RUN) in Visakhapatnam, Andhra Pradesh
Part A of the SPICe+ is the Reservation of the unique name for the proposed applicant name, which could be used for either the incorporation of a new company or for changing the name of an existing company. However, it is advised not to choose any name which is prohibited under the National Emblems Act 1950. Further, the applicant company needs to ensure that the chosen name doesn’t infringe the trademark of any existing company.
Once Part A is completed, the user has to choose the process further-
- Submit for name reservation by making payment of a fee;
- Proceed further to fill Part B or
- Cancel
Part B of the form contains-
- Application for DIN allotment;
- Application for PAN and TAN;
- Application for EPFO registration;
- Application for ESIC registration;
- Application for Professional tax registration (only for the state of Maharashtra);
- Application for allotment of GSTIN allotment;
- Application to open a business bank account
For filling all these above forms, the prescribed application forms have to be downloaded in a PDF format, filled, thoroughly checked and verified, and digitally signed before finally submitting the forms along with required documents & attachments.
The MCA has also relaxed the requirement related to payment of any fee for incorporation till the authorized capital up to Rs. 10Lakhs of authorized capital.
Step 4- Filling & Submission of MOA & AOA in Visakhapatnam, Andhra Pradesh
Memorandum & Articles of Association (MOA & AOA) are the primary documents of the company aimed for the purpose of laying bye-rules & regulations of the proposed company in dealing with its external as well as internal matters in its day-to-day working. The format for MOA & AOA has been prescribed in the form e- MoA (INC-33) and e-AoA (INC-34) respectively. After putting digital signatures by the subscribers to the Memorandum and Articles of Association, they could be submitted to the portal for final submission.
Step 5-Approval & Obtaining a Certificate of Incorporation (COI) in Visakhapatnam, Andhra Pradesh
After the verification of the application form, the approval authority will verify the documents & attachments and will grant the Certificate of incorporation which will be the ultimate evidence of approval of registration. The Certificate of Incorporation will be in pdf format with other certificates such as TAN, PAN & GSTIN certificates in the registered email address.
Documents Required for Private Limited Company Registration in Visakhapatnam, Andhra Pradesh
Documents of prospective members & Directors
i. Copy of ID proof such as Aadhaar, PAN card, Driving License, etc.
ii. Proof of Residence- All the proposed members & directors shall be required to submit a copy of a valid proof of residence that could be any of the documents such as a Voter’s ID/ Passport, Driver’s license / Aadhaar Card. However, the details related to the name in the proof of residence & PAN should exactly be the same. If there is any mismatch in details, it should be corrected before submission to RoC
iii. Copy of utility Bills- Copy of utility bills to verify the address proof which may include documents such as the latest bank statement, telephone bill, mobile bill, electricity bill, gas bill, etc.
iv. Passport-sized photographs on white background with specimen signature (blank document with signature [directors only])
Documents of prospective Private Limited Company Registration in Visakhapatnam, Andhra Pradesh
i. Proof of registered Address- Every Private Limited Company needs to submit identification proof for the registered address of the company during registration or within 30 days of its incorporation. In case the property is an owned property or purchased, a copy of the sale deed shall be required to be attached. On the other hand, if it’s rented, a copy of the rental agreement or lease deed should be submitted instead.
ii. In case the property is rented, a copy of NOC from the owner expressing no objection over the use of the property should be attached.
iii. Copy of the Utility bills of the registered office such as electricity or telephone bills. However, these Utility bills should not be older than more than 2 months.
Post Compliances after Incorporation in Visakhapatnam, Andhra Pradesh
Once you successfully incorporate your private limited company in Visakhapatnam, Andhra Pradesh, you need to be careful of the post-incorporation compliances, failing to fulfill which could lead to hefty penalties. Provided below are some of the key post incorporation that has been provided below-
i. Verification of the Registered Office Address- Every Private Limited Company must submit proof of registered office in e-form INC 22 within 30 days of the incorporation of the Private Limited Company. The e-form should be accompanied by all the required necessary documents & attachments.
ii. Certificate of Commencement of Business through INC 20 A- Next, the Private Limited Company must obtain a certificate of commencement of business by making an application by submitting within 180 days from the date of incorporation to the effect that each subscriber to the memorandum has consented to the share value taken by them.
iii. Appointment of First Auditor- Further, the Private Limited Company needs to appoint its first statutory auditor before the first Annual General Meeting of the Company, who will hold office till the sixth AGM until and unless he receives ratification or resignation concerning registration.
iv. Board Meetings- It shall be compulsory for every Private Limited Company to conduct at least two Board meetings in a financial year. It is also be noted that for every board meeting minutes should be prepared and maintained in the minute book of the Company. Further, the directors of a private limited shall attend the Board meetings.
v. Disclosure of Interest- It shall be compulsory for all the directors of the company to disclose any conflicting interest before the first Board Meeting of the company in e-form MBP-1.
vi. Annual Financial Statements- Finally, it shall be necessary for every Private Limited Company to file annual financial statements in the e-form AOC 4 every year within 30 days of the end of the Annual General Meeting.
Conclusion of Private Limited Company registration in Visakhapatnam, Andhra Pradesh
Therefore, a Private Limited Company registered in Visakhapatnam, Andhra Pradesh offers various benefits such as the benefit limited liability and perpetual succession procedural flexibility to its directors to manage their internal organization & manage their business efficiently. Further, the process of a Private Limited Company limited registration has been simplified under Ease of Doing Business which could be completed in four-five steps. Complete your process of private limited company registration & start your journey today!
