Types of Trademark: A Comprehensive Guide

Jan 28, 2025
Private Limited Company vs. Limited Liability Partnerships

A trademark is a unique identifier, such as a word, symbol, or design, that distinguishes the goods or services of one business from another. It plays a vital role in helping consumers identify the origin of products or services, ensuring authenticity and trust. 

There are different types of trademarks, including product marks, service marks, collective marks, and more. Each type serves a specific purpose, offering businesses a way to protect their intellectual property and enhance brand recognition. This article will explore the various categories of trademarks, their significance, and how they can be applied to businesses.

Table of Contents

Product Mark

A product mark is a kind of trademark used exclusively on goods, helping consumers identify the origin of the product and ensuring its authenticity. It plays a crucial role in distinguishing one business's goods from another, contributing to brand recognition and reputation.

Product marks fall under trademark classes 1 to 34, which categorise various types of goods, including chemicals, machinery, and textiles. For example, the "Nike" logo on shoes is a product mark that signifies the brand's origin and quality. 

Service Mark

A service mark is a trademark used to distinguish one business's services from those offered by others. Unlike product marks, which apply to goods, service marks highlight the origin and quality of services, helping customers identify and trust a particular service provider.

These marks typically fall under trademark classes 35 to 45, covering various services such as advertising, financial services, and hospitality. For instance, the "Taj Hotels" emblem represents a service mark that signifies premium hospitality services. 

Collective Mark

A collective mark is a type of trademark used to identify goods or services offered by members of a group, association, or institution. It ensures that the products or services meet specific quality or ethical standards set by the organisation holding the mark.

These marks distinguish the collective efforts of a group rather than an individual business. For example, the Chartered Accountant (CA) designation in India serves as a collective mark in trademark, representing professionals certified by the Institute of Chartered Accountants of India (ICAI).

Certification Mark

A certification mark is a symbol used to certify that a product meets specific standards related to origin, material, quality, or manufacturing methods. It guarantees that the certified product complies with established benchmarks, regardless of the owner’s business.

Certification mark examples include the "ISI" mark on electrical appliances and the "Agmark" label on food products in India, both of which assure consumers of quality and safety. Such marks are commonly found on food, electronics, and toys.

Shape Mark

A shape mark protects the distinctive shape of a product, enabling consumers to associate it with a specific brand. It ensures that unique designs contributing to a product's identity remain exclusive to the brand. For instance, the iconic contour shape of Coca-Cola bottles and the unique design of Fanta bottles are classic examples of shape marks that enhance brand recognition and trust.

Pattern Mark

A pattern mark protects distinctive designs or patterns used on a product to set it apart from competitors. To qualify, the pattern must be unique and easily recognisable—generic or common patterns are often rejected. For example, the well-known Burberry check pattern on their clothing and accessories is a classic pattern mark that helps identify the brand.

Demonstrating the uniqueness of the pattern is essential for successful registration, as it ensures the design remains exclusive to the brand, reinforcing its identity in the market.

Sound Mark

A sound mark is a unique audio signature linked to a product or service, allowing consumers to identify its origin through sound. It plays a significant role in branding, often used as an audio mnemonic in advertisements. A well-known example in India is the IPL tune, which instantly evokes recognition of the Indian Premier League.

Arbitrary and Fanciful Trademarks

Arbitrary and fanciful trademarks are distinct categories that stand out for their unique qualities. A fanciful mark is a made-up term or word with no prior meaning, making it highly distinctive and easy to register. For example, "Google" and "Kodak" are fanciful marks, as these words were coined specifically for the brands and have no inherent connection to their respective products.

On the other hand, an arbitrary mark uses a commonly known word but has no direct relation to the product or service it represents. "Apple," for instance, is an arbitrary mark since it’s a well-known word but doesn’t link directly to computers or electronics. 

Geographical Indications (GI)

A Geographical Indication (GI) is not a type of trademark but a separate form of intellectual property protection. It denotes a product’s specific geographic origin and assures consumers of its quality or reputation linked to that region. GIs help preserve the uniqueness of products tied to their location. For example, "Darjeeling Tea" and "Banarasi Silk" are GIs that signify the products’ origins and qualities unique to those regions.

How to Choose the Right Type of Trademark?

  1. Assess the Nature of Your Product/Service

    Determine the characteristics and qualities of your product or service. Understanding its nature helps in choosing the appropriate trademark type. For instance, if your product has a unique shape or design, a shape mark could be suitable. If your service stands out for its quality or reputation, a service mark might be more fitting.
  1. Focus on Branding Goals and Industry Standards

Consider your branding goals—whether you aim to build recognition, guarantee quality, or differentiate your offering. Also, take into account industry practices.

For instance, if you're part of a group or association, a collective mark might be more suitable, whereas a certification mark may be necessary for products requiring quality assurance. Ensure that the trademark aligns with your long-term branding strategy.

  1. Consult a Trademark Expert if Necessary

If you are uncertain about which trademark suits your business, it’s advisable to consult a trademark expert. They can assess your product or service and guide you on the best trademark type based on legal requirements and market needs. This ensures that your trademark selection is legally sound and provides optimal protection.

Examples of Trademarks in Action

  1. Food Industry

    Pepsi uses a product mark that consists of its distinctive logo, which is instantly recognisable by its red, white, and blue colour scheme. This trademark is essential in helping customers identify the Pepsi brand in a competitive market filled with various soft drink options. The product mark not only includes the logo but also the unique design of its packaging, ensuring that every Pepsi product stands out on store shelves.
  1. Fashion Industry

Louis Vuitton has trademarked its iconic monogram pattern as a pattern mark. This pattern, featuring the “LV” logo repeated across their products, is instantly recognisable worldwide. The distinctive design appears on bags, luggage, and other luxury accessories, making it a signature of high-end fashion.

By using this pattern mark, Louis Vuitton differentiates itself from other brands and maintains its status in the luxury market, ensuring that customers associate the design with quality and exclusivity.

  1. Technology Industry

    The name Microsoft is a suggestive mark. It combines “microcomputer” and “software,” hinting at its products (software for small computers) without explicitly describing them. Suggestive marks require consumers to make a mental connection between the name and the product or service.


This type of trademark is distinctive while maintaining a subtle association with the brand's offerings, making it a powerful branding tool in the technology sector.

  1. Hospitality Industry

    Marriott International uses a service mark to represent its brand and distinguish its services in the hospitality industry. The service mark covers not only the name “Marriott” but also its reputation for providing high-quality customer service, luxury, and a wide range of hospitality offerings.

From hotels to resorts, Marriott’s service mark assures customers of a consistent experience, helping the brand stand out in the competitive world of hotels and travel.

Frequently Asked Questions

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Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What are the different types of trademarks?

The different types of trademarks include product marks, service marks, collective marks, certification marks, shape marks, pattern marks, and sound marks etc. 

What are 2 examples of a trademark?

Two examples of trademarks are the "Nike" swoosh logo, representing the brand's sportswear and footwear, and the "Apple" logo, symbolising the technology company's products like iPhones and Macs. 

What are the different types of IPR?

Intellectual Property Rights (IPR) include copyrights, trademarks, patents, designs, and geographical indications (GI). These rights help protect the creations and innovations of individuals or businesses, ensuring legal protection and exclusivity.

What is the full form of TRIPS?

TRIPS stands for Trade-Related Aspects of Intellectual Property Rights. It is an international legal agreement that sets minimum standards for protecting and enforcing intellectual property rights across countries.

How to register a product mark in India?

To register a product mark in India, you need to select a trademark agent (if not based in India), choose a distinctive mark and relevant class, and conduct a search for availability. Then, file the application with the required documents and fees. The application will be examined, published for opposition, and, if no objections arise, it will be registered for 10 years.

Benefits of having a service mark for your business

A service mark helps protect your business’s identity and reputation in the market. It distinguishes your services from competitors, boosts consumer confidence, and provides legal protection against imitation. 

What is a collective mark and how does it work?

A collective mark is a trademark used by members of a group, association, or organisation to signify that the goods or services meet certain standards the collective owner sets. It helps distinguish products or services from those of non-members, ensuring quality and origin.

Sarthak Goyal

Sarthak Goyal is a Chartered Accountant with 10+ years of experience in business process consulting, internal audits, risk management, and Virtual CFO services. He cleared his CA at 21, began his career in a PSU, and went on to establish a successful ₹8 Cr+ e-commerce venture.

He has since advised ₹200–1000 Cr+ companies on streamlining operations, setting up audit frameworks, and financial monitoring. A community builder for finance professionals and an amateur writer, Sarthak blends deep finance expertise with an entrepreneurial spirit and a passion for continuous learning.

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Related Posts

Conversion of Private Limited Company to Public Limited Company: Step-by-Step Guide

Conversion of Private Limited Company to Public Limited Company: Step-by-Step Guide

For most growing businesses, starting out as a Private Limited Company (Pvt Ltd) feels like the natural choice- it offers the safety net of limited liability, manageable compliance requirements, and the flexibility to focus on building the business without too much red tape. But as the business scales, ambitions grow bigger. You might want to raise significant capital, bring in a larger investor base, or even dream of going public someday. That’s when converting into a Public Limited Company starts making real sense.

So, what changes when you move from private to public?

  • Access to Public Funds: Unlike a private company, a public limited company can tap into larger funding avenues through IPOs or private placements, opening doors to serious growth capital.

  • Ease of Share Transfer: In a public company, shares are freely transferable, making it easier for investors or shareholders to buy, sell, or exit, boosting liquidity and appeal.

  • No Member Cap: Private companies are capped at 200 shareholders, but public companies have no such limit, giving you the freedom to expand your ownership base.

In this guide, we’ll break down exactly what it takes to convert your private company into a public one under the Companies Act, 2013, and walk you through the compliance steps and practical things you need to be ready for once you’ve made the leap.

Table of Contents

Procedure for Conversion into a Public Limited Company

Converting a private limited company into a public limited company in India is governed by the Companies Act, 2013, and involves a formalised legal process. Here’s a step-by-step guide:

1. Convene a Board Meeting

2. Issue Notice for EGM

  • Send notices to all shareholders, directors, and auditors at least 21 days before the meeting.
  • The notice should include the agenda, draft resolutions, and explanatory statements.

3. Hold the Extraordinary General Meeting (EGM)

  • Pass a Special Resolution to approve the conversion from private to public.
  • Approve necessary alterations in the MoA (removal of “Private”) and AoA (removal of restrictive clauses on share transfer and member limits).

4. Filing with Registrar of Companies (RoC)

Submit the following forms with the Ministry of Corporate Affairs (MCA) portal:

  • MGT-14: Filing of special resolutions within 30 days of passing them.
  • INC-27: Application for conversion, along with certified copies of resolutions, amended MoA/AoA, and EGM minutes.

5. Scrutiny and Approval by RoC

The Registrar reviews the application and, upon satisfaction, issues a Fresh Certificate of Incorporation reflecting the change in company status from private to public.

Related Read: Private Company Vs Public Company: Key Differences Explained

Post-Conversion Requirements

Once the company has been converted into a public limited company, several post-conversion formalities must be completed to align with regulatory and operational standards:

1. Update Statutory Documents

  • Obtain a new PAN reflecting the updated company name.
  • Revise all statutory records, financial statements, and company stationery (letterheads, invoices, website, etc.).

2. Inform Bankers and Financial Institutions

  • Update your company’s status with existing banks and financial institutions.
  • Amend authorised signatories if required.

3. Intimate Regulatory Authorities

  • Notify relevant authorities such as tax departments, GST authorities, and regulatory bodies, if applicable.

4. Compliance with Public Company Norms

  • Increase the number of directors to a minimum of 3 (as required for a public company).
  • Appoint independent directors and comply with applicable listing regulations (if planning for a stock exchange listing).
  • Adhere to enhanced disclosure norms, audit requirements, and corporate governance standards.

5. Prepare for Capital Raising (Optional)

  • If planning an IPO, start preparing for SEBI compliance, drafting offer documents, and engaging with merchant bankers.

Frequently Asked Questions (FAQs)

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Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What Is the Form for Conversion of a Private Company into a Public Company?

The primary form used for the conversion of a private limited company into a public limited company in India is Form INC-27. It must be submitted along with supporting documents like the altered Memorandum of Association (MoA), Articles of Association (AoA), special resolution copy, and EGM minutes.Additionally, Form MGT-14 (for filing special resolutions) must also be filed within 30 days of passing the resolution at the EGM.

Can a Private Limited Company Go Public?

Yes, a Private Limited Company can go public by converting itself into a Public Limited Company.

After conversion, the company must comply with public company regulations under the Companies Act, 2013, including increased disclosure norms, appointment of independent directors (if applicable), and adherence to corporate governance standards.

What Section of the Companies Act, 2013 Governs Conversion of a Public Company into a Private Company?

The conversion of a Public Company into a Private Company is governed by Section 14 of the Companies Act, 2013.

  • Section 14(1) deals with altering the Articles of Association (AoA) to include provisions applicable to a private company.
  • Such a conversion requires passing a special resolution and obtaining approval from the Tribunal (NCLT) as mandated under Section 14(2).

Sarthak Goyal

Sarthak Goyal is a Chartered Accountant with 10+ years of experience in business process consulting, internal audits, risk management, and Virtual CFO services. He cleared his CA at 21, began his career in a PSU, and went on to establish a successful ₹8 Cr+ e-commerce venture.

He has since advised ₹200–1000 Cr+ companies on streamlining operations, setting up audit frameworks, and financial monitoring. A community builder for finance professionals and an amateur writer, Sarthak blends deep finance expertise with an entrepreneurial spirit and a passion for continuous learning.

Read more
Private Limited Company (Pvt Ltd): Definition, Meaning, How to Register & Documents Required

Private Limited Company (Pvt Ltd): Definition, Meaning, How to Register & Documents Required

What is the meaning of a Private Limited Company?

A Private Limited Company (Pvt Ltd) is a business entity where ownership is confined to a limited number of shareholders, and its shares are not available for public trading on stock exchanges. This structure ensures that control remains within a close-knit group of individuals or entities.

Private limited company meaning as per Section 2 (68) of the Companies Act, 2013 is A Company having a minimum paid-up share capital as may be prescribed and which, by its articles

1. Restricts the right to transfer its shares

2. Except in case of One Person Company, limits the number of its members to two hundred

3. Prohibits any invitation to the public to subscribe for any securities of the company.

With the startup ecosystem booming across the country and more and more people looking to do something on their own, there is a need to be well-acquainted with different business registration types, i.e. sole proprietorship, limited liability company, and private limited company.

Table of Contents

Private Limited Company Examples

Here are some examples of private limited companies in India

  • Google India Pvt. Ltd. A subsidiary of Google LLC
  • Amazon Retail India Private Limited: An online shopping platform
  • Microsoft Corporation (India) Private Limited: An information technology company with its registered office in Delhi.

Types of Private Limited Company

There are three types of Pvt. Ltd. Company registration, and entrepreneurs can choose the one that best suits the needs of their business.

1. Company Limited by Shares

  • Ownership: The ownership of the company is divided into shares.
  • Liability: The liability of the shareholders is limited to the amount of shares they have subscribed to.
  • Capital Structure: The company raises capital by issuing shares to shareholders.
  • Common Use: This is the most common type of company, suitable for businesses of all sizes.

2. Company Limited by Guarantee

  • Ownership: Ownership is not based on shares but on membership.
  • Liability: The liability of the members is limited to the amount they guarantee to contribute to the company in the event of winding up.
  • Capital Structure: The company doesn’t raise capital through shares but relies on donations, grants, or membership fees.
  • Common Use: Often used for non-profit organizations, clubs, or societies.

3. Unlimited Company

  • Ownership: The ownership structure can vary.
  • Liability: The liability of the members is unlimited, meaning their personal assets can be used to settle the company’s debts.
  • Capital Structure: The company can raise capital through various means, including issuing shares.
  • Common Use: This type of company is less common and is usually used for specific purposes, such as family businesses or holding companies.

Characteristics of a Private Limited Company

Following are some of the main advantages of a private limited company:

1. Members

The act mandates that a minimum of two shareholders are required to start such a company, while the limit for maximum number of members is fixed at 200.

2. Directors

The Act specifies the number of directors in a private limited company, requiring a minimum of two directors, while allowing a maximum of up to 15 directors.

3. Limited Liability Structure

In a private limited company, the liability of each member or shareholder is limited. Therefore, even in the case of loss under any circumstances, the shareholders are liable to sell their assets for repayment. However, the personal and individual assets of the shareholders are not at risk.

4. Separate Legal Entity

This is a separate legal entity and continues in perpetual succession. This means that even if all the members die, or the company becomes insolvent or bankrupt, the company still exists in the eyes of the law. The life of the company will be perpetual, not affected by the lives of its shareholders or members unless dissolved by way of resolution.

5. Minimum Paid-Up Capital

A private limited company is required to have and maintain a minimum paid-up capital of ₹1 lakh. It could go higher, as prescribed by MCA from time to time.

Requirements to Start a Private Limited Company

Every business type has its own set of requirements before it is incorporated.

The requirements for registering this are as stated below:

1. Members and Directors

As mentioned above, to get itself legally registered, a private limited company means it must show a minimum number of two and a maximum number of 200 members. This is a statutory requirement as mandated by the Companies Act 2013.

The directors should meet the following conditions:

  • Each of the directors should have a DIN i.e. director identification number, which is given by the Ministry of Corporate Affairs
  • One of the directors must be a resident of India, which means he/she should have stayed in India for not less than 182 days in the previous calendar year.

2. Name of the Company

Choosing the name of the company is often a technical task. A private limited company is required to cover three aspects while deciding a name for itself:

  1. Main name
  2. Activity to be carried out
  3. Mention of ‘Private Limited Company’ at the end.

Pro tip: It is not always necessary that the name the business owner is looking for will be available, as no two companies can have the same name. Therefore, it is a requirement that at the time of registration, every company has to send 5-6 names for approval to the Registrar of Company (ROC). Moreover, the submitted names should not have a close resemblance with any other company’s name.

3. Registered Office Address

After the company has been registered, the permanent address of its registered office must be filed with the registrar of the company. The registered office of the company is where the company’s main affairs are being conducted and where all the documents are placed.

4. Obtaining Other Documents

For electronic submission of documents, every company must obtain a digital signature certificate that is used to verify the authenticity of the documents. Moreover, in a company employing professionals (secretaries, chartered accountants, cost accountants, etc.) for varied activities, certifications by these professionals are necessary.

List of Documents Required for Private Limited Company

The documents required to incorporate a Pvt Ltd company include:

1. Identity Proof

Document verifying the identity of individuals such as PAN card and passport of Indian and foreign directors, respectively.

2. Address Proof

Document confirming the residential address of individuals such as utility bills or rental agreements.

3. Director Identification Number (DIN)

Unique identification number allotted to directors by the Ministry of Corporate Affairs.

4. Digital Signature Certificate (DSC)

Electronic signature ensuring the authenticity of documents filed electronically.

5. Memorandum of Association (MoA)

Legal document defining the company’s objectives and scope of operations.

6. Articles of Association (AoA)

Document outlining the rules and regulations governing the internal management of the company.

7. Declaration by Directors and Subscribers

Formal statement by directors and subscribers confirming compliance with legal requirements for company incorporation.

8. No Objection Certificate (NOC) from the landlord

Consent from the landlord permitting the use of premises as the company’s registered office.

9. Shareholding Pattern of the Proposed Company

Overview of the distribution of shares among shareholders in the company.

10. Proof of Registered Office Address

Documentation confirming the address where the company is registered and operates from.

How to Register Pvt Ltd Company? A Step-by-Step Guide

To register a private limited company in India the following steps are mandatory:

STEP 1: Choose a Unique Name for Your Business

  • Choose a unique name that reflects your business’s identity and vision and is not in use by another company or trademarked by someone else.
  • You can check for name availability on the Ministry of Corporate Affairs (MCA) official company registration website or the relevant regulatory authority in your state or union territory.

STEP 2: Obtain Digital Signatures from Authorised Agency

  • Obtain Digital Signature Certificates (DSC) for your company’s proposed directors and shareholders from any authorised agency or vendor registered with the MCA or the Certifying Authority (CA) under the Information Technology Act, 2000.
  • Digital signatures are essential for filing online documents with government authorities and verifying your identity and authenticity.

STEP 3: Obtain Director Identification Number (DIN) from MCA Portal

  • Apply for a Director Identification Number (DIN) online through the MCA portal by filling out the form DIR-3 and uploading the required documents, such as identity proof, address proof, and photographs for each of the directors of your company.
  • The MCA assigns a unique identification number to every individual who intends to be a company director.

STEP 4: Prepare Memorandum and Articles of Association

  • The MOA is a document that defines your company’s main objectives, scope, and activities whereas AOA lays down the rules and regulations for the management and administration of your company.
  • You can prepare the MOA and AOA online through the MCA portal by using the SPICe+ form and the templates provided by the MCA.

STEP 5: Get Consent and Declarations

  • The directors must consent to act as directors by filling out the form DIR-2 and attaching their DSC.
  • The shareholders must provide their declarations of compliance with the Companies Act, 2013 and the rules made thereunder by filling out the form INC-9 and attaching their DSC.

STEP 6: Apply for Company Name Approval

  • Submit the name approval application with the required documents to the Registrar of Companies (RoC) of the state or union territory where your company will be registered.
  • You can apply for name approval online through the MCA portal using the SPICe+ form and paying the prescribed fees.

STEP 7: File Incorporation Documents

  • You can file the incorporation documents for LLC online through the MCA portal using the SPICe+ form and pay the prescribed fees.
  • You need to attach documents, including the MOA, AOA and a few more, like AGILE-PRO, INC-14, 1NC-15, etc., along with the SPICe+ form.

STEP 8: Pay Registration Fees

  • The registration fees vary depending on the amount of authorised share capital and the state or union territory where your company is registered.
  • You can pay the fees online through the MCA portal using the SPICe+ form and the payment gateway.

STEP 9: Verification and Approval

  • The RoC will carefully assess the documents, and if they meet all requirements, they will issue the Certificate of Incorporation which can be downloaded from the MCA portal.
  • It is a legal document that confirms the existence and registration of your company.

STEP 10: Obtain PAN and TAN

  • Apply for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) online through the MCA portal using the AGILE-PRO form and the payment gateway.
  • PAN is a 10-digit alphanumeric code used to identify your company for tax purposes.
  • TAN is a 10-digit code used to deduct and collect tax at source from payments made by your company.

STEP 11: Open a Bank Account in a Company’s Name

  • Open a bank account in your company’s name and deposit the minimum capital required. The minimum capital for a pvt. ltd. company is ₹1 lakh.

STEP 12: Obtain Business Licenses

Licencing and permit requirements can differ depending on the nature of your business.

You may need to obtain them from various authorities, such as:

  • Trade licence from Municipal Corporation or Panchayat
  • Environmental clearance from the Pollution Control Board
  • Industrial licence from the Department of Industrial Policy and Promotion (DIPP)
  • Quality certification from the Bureau of Indian Standards (BIS)
  • Trademark, patent, or design registration from the Intellectual Property Office (IPO)

STEP 13: Register Your Business Under GST

  • Register for GST and comply with other tax obligations. You must register for GST if your annual turnover exceeds ₹40 lakh (₹20 lakh for special category states).

STEP 14: Commence Business Operations

  • After diligently completing the above procedure, your Private Limited Company is ready to commence its operations.

Read More About: How to register a Private Limited Company online in India?

What Are the Registration Costs for a Private Limited (Pvt Ltd) Company?

The registration charges for a Private Ltd. Company depend on share capital, number of directors, stamp duty of the state where you want to register the company and other fees.

Particulars Amount (in ₹)
Name Reservation ₹1000
DIN Application Fee ₹500 per DIN
DSC Fee ₹1,500 per DSC
Memorandum of Association Fees ₹200 per lakh of authorised share capital or part thereof
Articles of Association Fee ₹300 per lakh of authorised share capital or part thereof
PAN Application Fee ₹66
TAN Application Fee ₹65
Stamp Duty Varies from state to state
Professional Tax Registration Fee Varies from state to state

What Is the Registration Timeline for a Private Limited Company?

The answer is not very simple, as it depends on various factors such as the availability of the company name, the documents required, and the workload of the government authorities. Therefore, the overall timeline for registering a private limited company in India can take around 12-18 days, depending on the time taken to complete each step and the workload of the government office processing the application.

Advantages of Private Limited Companies

1. Limited liability

In a private limited company, there is a limited liability, which means the company’s members are not at risk of losing their private assets. If a company fails, the shareholders are liable to sell their assets for payment.

2. Less number of shareholders

Unlike a public company that requires seven shareholders, a private limited company can be started with just two shareholders.

3. Ownership

As the company’s shares are owned by investors, founders, and management, the owners are at the liberty of transferring and selling their shares to others

4. Uninterrupted existence

As mentioned earlier, the company stays a legal entity until it is legally shut down, the company runs even after the death or departure of any member.

Disadvantages of Private Limited Companies

Now that you know what is Pvt Ltd company, its benefits, and how to register a company in India, let’s understand the disadvantages.

One of the disadvantages it gets with Pvt limited company is the compliance formalities for shutting it down. It often ends up getting too complicated and time-consuming.

FAQs

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Limited Liability Partnership
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  • Professional services 
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Private Limited Company
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BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
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One Person Company
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1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
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BEST SUITED FOR
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Limited Liability Partnership
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  • Professional services 
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  • Firms sharing resources with limited liability 

Frequently Asked Questions

Is a private company better than a public?

Private companies have the upper hand over public companies concerning investment in long-term strategies, keeping the values of their shares and financial figures discreet, freedom, and flexibility of operations.

What are the minimum and maximum numbers of members in a private company?

The minimum number of members in a private company is 2 directors and 2 members are required. All these members have limited liability, and the maximum number of members has increased from 50 to 200.

How much does it cost to form a private limited company?

The cost of establishing/registering a Pvt Ltd Company generally varies from INR 6,000 to INR 30,000, depending upon the number of Directors, members, the authorized share capital, and professional fees.

What is compulsory for a private limited company?

Under Section 134, all private companies must hold an annual general meeting. These companies are required to hold their meetings within six months of closing their Financial year.

What is the difference between LLP and Pvt Ltd?

LLP is a partnership where the partners have restricted liability and are not liable for the actions of other partners, whereas, in a Pvt Ltd company, the shareholders have limited liability and can transfer their shares to others. LLP has less compliance and tax burden than Pvt Ltd and less scope for raising funds from external sources.

What is the minimum turnover for a Pvt Ltd company?

There is no minimum turnover prerequisite for a Pvt Ltd company in India. However, certain threshold limits under the Companies Act 2013 trigger different compliances for Pvt Ltd companies, such as certification of annual return, corporate social responsibility, internal audit, appointment of auditor, etc. These threshold limits are based on the paid-up share capital, turnover, net worth, net profit, loans, borrowings, deposits, etc., of the Pvt Ltd company.

Sarthak Goyal

Sarthak Goyal is a Chartered Accountant with 10+ years of experience in business process consulting, internal audits, risk management, and Virtual CFO services. He cleared his CA at 21, began his career in a PSU, and went on to establish a successful ₹8 Cr+ e-commerce venture.

He has since advised ₹200–1000 Cr+ companies on streamlining operations, setting up audit frameworks, and financial monitoring. A community builder for finance professionals and an amateur writer, Sarthak blends deep finance expertise with an entrepreneurial spirit and a passion for continuous learning.

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Articles of Association (AoA) of a Company in India: Meaning and Importance

Articles of Association (AoA) of a Company in India: Meaning and Importance

The Articles of Association (AOA) define a company’s internal rules, governance, and management structure. It regulates the relationship between shareholders and the company, covering voting rights, dividends, and decision-making.

The AOA of a company must comply with the Companies Act, 2013 to ensure legal validity. It works alongside the Memorandum of Association to guide corporate operations. Understanding its role is essential for business owners, investors and stakeholders to ensure smooth management and legal compliance.

Table of Contents

Definition of Articles of Association Under Companies Act 2013

The Articles of Association, as per the section 2(5) of Companies Act, 2013, is a legally binding document that defines a company’s internal regulations and governance. It outlines the rights, duties, and responsibilities of shareholders, directors, and officers, ensuring structured management. Governed by Section 5 of the Companies Act, 2013, the AOA plays a crucial role in decision-making, dispute resolution, and compliance. A well-drafted AOA is essential for smooth company operations and legal clarity.

Objectives Outlined in Articles of Association

Section 5 of the Companies Act, 2013, defines the objective of AOA, outlining the internal rules that govern a company's management. Here are key objectives of Articles of Association:

  • Serve as a regulatory framework, ensuring compliance with legal provisions.
  • Define the company’s matters as prescribed under the relevant rules.

Additionally, companies have the flexibility to add provisions or make necessary alterations to their Articles of Association, provided they comply with legal requirements.

Purpose of Articles of Association

  • Governance Framework: The AOA acts as a rulebook for a company’s management, outlining the rights and duties of directors, shareholders, and officers. It establishes decision-making processes and ensures smooth operations.
  • Legal Requirement: As per the Companies Act, 2013, every company must have an AOA, which must be submitted to the Registrar of Companies (ROC) during incorporation. It serves as a legally binding document governing corporate affairs.
  • Operational Clarity: The AOA defines clear procedures for shareholder meetings, director appointments, and financial management, ensuring all stakeholders understand company regulations and business operations.
  • Shareholder Protection: It safeguards shareholder rights by establishing rules for voting, dividends, and dispute resolution. It also provides mechanisms to address conflicts and protect minority shareholders.
  • Flexibility for Future Changes: The AOA allows modifications to accommodate business growth, structural changes, or legal amendments, provided the changes comply with the Companies Act, 2013.

By setting a lawful, transparent, and structured operational framework, the AOA ensures corporate stability and effective governance.

Scope and Extent of Articles of Association

The Articles of Association are legally binding on all current and future members, including heirs, successors, and legal representatives. They form a contractual agreement between the company and its members, outlining mutual rights, duties, and obligations. The Memorandum of Association sets the company's main objectives and key details, and it can only be changed at an Annual General Meeting (AGM) or Extraordinary General Meeting (EGM) with statutory approval.

The Registrar of Companies ensures that the company follows all legal regulations and operates within the law. Additionally, the shareholders have the right to appoint auditors who review financial records and ensure transparency in the company's finances.

Nature of Articles of Association

The Articles of Association is a legally binding document that governs a company’s internal management and operations. It sets the rules that directors, shareholders, and officers must follow. It also defines their rights, duties, and responsibilities within the company. By ensuring a structured and lawful operational framework, the AOA serves as the foundation of corporate governance, helping companies function efficiently and transparently.

Contents Encompassed Within the Articles of Association

  • Share Capital: It defines shareholder rights, share certificates, and commission payments.
  • Shareholder Rights: It specifies voting rights and dividend entitlements.
  • Share Transactions: It covers share transfer, transmission, forfeiture, and surrender.
  • Capital Alteration: It details processes for increasing, decreasing, or restructuring capital.
  • Governance: It outlines director appointments, qualifications, powers, and board meetings.
  • Financial Matters: It includes provisions on borrowing powers, accounts, audits, and reserves.
  • Winding Up: It specifies procedures for closing the company and settling liabilities.

Components of AOA

  • Name Clause: It states the official name of the company and specifies whether it is a public or private ltd. company.
  • Registered Office Clause: It defines the company’s registered office address, which serves as the official location for all legal communication.
  • Object Clause: It outlines the main objectives of the company and lists the business activities it is legally allowed to undertake.
  • Liability Clause: It explains whether the members (shareholders) of the company have limited or unlimited financial liability.
  • Share Capital Clause: It specifies the authorised share capital of the company, the different types of shares issued, and the rights and privileges of shareholders.
  • Management Clause: It defines the powers, responsibilities, and duties of the directors, along with the procedures for their appointment, removal, and remuneration.
  • General Meetings Clause: It sets the rules for conducting shareholder meetings, including notice periods, quorum requirements, voting rights, and decision-making procedures.
  • Dividend Clause: It explains how and when the company distributes profits in the form of dividends to its shareholders.
  • Winding-Up Clause: It describes the process for dissolving the company in case of liquidation, bankruptcy, or closure.

These components work together to create a structured framework that governs the company’s operations, financial management, and legal compliance.

Different Forms of Articles of Association

The Articles of Association must follow specific formats outlined in Schedule I, with forms categorised under Tables F, G, H, I, and J, depending on the type of company. Companies are required to adopt the form that aligns with their legal structure while registering their AOA.

Table Details of the Form
Table F Form for the Articles of Association for a company limited by shares
Table G Form for the Articles of Association for a company limited by guarantee and having a share capital
Table H Form for the Articles of Association for a company limited by guarantee and not having a share capital
Table I Form for the Articles of Association for an unlimited company and having share capital
Table J Form for the Articles of Association for an unlimited company and not having a share capital

Role of AOA in Company Registration

The Articles of Association play a crucial role in the company registration process. Along with the Memorandum of Association, it is a mandatory document required for incorporation under the Companies Act, 2013. The AOA defines the company’s internal governance, specifying rules for management, the rights and duties of members, and operational procedures. A well-structured AOA ensures legal compliance, protects stakeholders' interests, and provides clear guidelines for future operations. It also helps in conflict resolution by outlining decision-making processes and responsibilities, ensuring the smooth functioning of the company.

Difference Between Memorandum and Articles of Association

Particulars Memorandum of Association Articles of Association
Purpose Defines the company's constitution, objectives, and operational scope. Establishes internal rules for management and governance.
Contents Includes mandatory clauses such as name, registered office, object, liability, and capital. Contains provisions for administration, shareholder rights, and director responsibilities.
Scope Regulates the company's relationship with external parties. Governs the relationship between the company, its members, and directors.
Legal Requirement Must be filed with the Registrar of Companies during registration. Drafting is mandatory, but filing with the ROC is optional.
Hierarchy Supreme legal document, subordinate only to the Companies Act. Subordinate to both the MOA and the Companies Act.
Interrelation Acts as the primary document guiding the drafting of the AOA. Any provision contradicting the MOA is invalid.
Acts Beyond Scope Actions beyond the MOA are void and cannot be ratified. Actions beyond the AOA can be approved by shareholders.
Alteration Changes require a special resolution at an AGM and, in some cases, government approval. Can be amended through a special resolution at an AGM.
Retrospective Changes Cannot be amended retrospectively. Can be amended retrospectively.

Conclusion

The Memorandum of Association and Articles of Association are essential documents for company formation and governance. While the MOA defines the company’s objectives and its relationship with external entities, the AOA outlines the internal rules for management, ensuring smooth operations. A well-drafted AOA, aligned with legal provisions, helps establish clear roles for directors, shareholders, and stakeholders, fostering transparency and efficiency. Together, these documents provide a strong legal foundation, guiding the company's growth and compliance with regulatory requirements, making them indispensable for long-term success.

Frequently Asked Questions

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Limited Liability Partnership
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Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
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  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
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1,499 + Govt. Fee
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  • Service-based businesses
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Limited Liability Partnership
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BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What are the conditions for the provisions of entrenchment in the AOA?

The provisions for entrenchment can be included in AOA either at the time of company formation or through an amendment. In both cases, the company must notify the ROC.

The inclusion of entrenchment provisions can be done:

  • At the time of company formation by incorporating them in the initial AOA.
  • Through an amendment with the approval of all company members.
  • In a public limited company by passing a special resolution.

Can the AOA be altered?

Yes, the AOA can be altered at any time through a special resolution. The revised AOA must be filed with the Registrar of Companies to be legally valid.

Can the AOA go beyond the scope of the MOA?

No, the AOA cannot go beyond the scope of the MOA. Any provision in the AOA that exceeds the scope of the MOA is considered ultra vires (beyond legal authority) and is deemed invalid.

How do Articles of Association differ from Articles of Incorporation?

The Articles of Association govern a company’s internal management, outlining rules for operations, shareholder rights, and director responsibilities. In contrast, Articles of Incorporation (also known as a Certificate of Incorporation) are legal documents filed with the government to officially register a company.

Who creates Articles of Association?

The founders or promoters of a company draft the AOA at the time of company incorporation. It is then submitted to the Registrar of Companies along with the MOA for approval.

Sarthak Goyal

Sarthak Goyal is a Chartered Accountant with 10+ years of experience in business process consulting, internal audits, risk management, and Virtual CFO services. He cleared his CA at 21, began his career in a PSU, and went on to establish a successful ₹8 Cr+ e-commerce venture.

He has since advised ₹200–1000 Cr+ companies on streamlining operations, setting up audit frameworks, and financial monitoring. A community builder for finance professionals and an amateur writer, Sarthak blends deep finance expertise with an entrepreneurial spirit and a passion for continuous learning.

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