Every major company begins with one major step, turning your dreams into reality. After all the late nights and planning, you are finally ready to make your dream a legal entity through Pvt Ltd Company registration. It’s a significant milestone and opens up new avenues for growth, funding, and credibility.
The process of registering a Private Limited Company is comparatively easier than it was in the past. However, even the smallest error, such as the wrong document, an incorrect detail, or a missed requirement, can result in a rejection or a frustrating delay. So, in this blog, let’s take a look at the most common reasons for Pvt Ltd company registration rejection and how you can avoid them.
Major Reasons for Pvt. Company Registration Rejection in India
1. Wrong or Inconsistent Details of Directors
One of the most common reasons for rejection of a Private Limited Company registration is inconsistent details about the directors of the company. Even a minor spelling issue or typo can lead to inconsistencies with the particulars on your PAN, Aadhaar, or company incorporation documents. Sometimes, the details filled in on the MCA portal do not match up with official records, and that’s all it takes to raise a flag on your application. Such mismatches immediately flag the application for non-adherence to the KYC requirements under the Companies Act, 2013.
How to Avoid It:
Prior to initiating the application, a meticulous verification audit must be conducted. Read and double-check each ID and document being submitted. Ensure the spelling of your names, birth date, etc., aligns in all documents. Investing an extra couple of minutes to check can avoid delays in the process.
2. Unsatisfactory or Insufficient Proof of Address
A key part of the verification process relies on you providing your company’s registered office address, and a simple oversight can result in rejection. This could be anything from using an old electricity bill, failing to provide NOC from the property owner, or uploading property documents that are overly ambiguous or complex. Address mismatch between the proof and the registered address in the application is also a common reason for rejection.
How to Avoid It:
Only use a utility bill or rent agreement issued within the last two months. If you’re renting the office space, provide a clear NOC from the landlord or property owner. Also, check that every document, including your incorporation application form, has the same registered address. A five-minute review would save you a lot of trouble with approvals.
3. Mistakes in Drafting MOA and AOA
The Memorandum of Association (MOA) and Articles of Association (AOA) are your company’s guiding documents. Essentially, their content outlines both what your business will do and how it operates. Any minor errors could be enough to justify rejection. For example, if you haven’t properly outlined your object clause to clearly relate to your business activity, or if there are any sort of typographical or formatting errors, your application may not be approved.
How to Avoid It:
Always obtain your MOA and AOA drafted or reviewed by someone who is well-versed in legal drafting. You must ensure that what you are writing accurately reflects your main and supporting business activities and is legally permissible. Also, re-check the e-MOA and e-AOA formats before submitting them for accuracy.
4. Incomplete or Improper Digital Signatures (DSC)
Your Digital Signature Certificate (DSC) validates your online application. In case it is invalid or has expired, your application will cease to exist at that point. Sometimes, the DSC is not properly linked to the Director Identification Number (DIN), which can create verification issues. These minor omissions can risk rejection.
How to Prevent It
Obtain a valid Class 3 DSC for every director involved in the registration. Before uploading the registration forms, confirm the DSC is valid and properly linked to the director’s DIN on the MCA portal. Further, test if the DSC is functioning properly on the MCA portal. A quick check can save you from annoying delays at later stages.
5. Not Meeting Minimum Statutory Requirements
In some cases, applications can be rejected simply for not adhering to basic rules. For example, a Private Limited Company must have a minimum of 2 directors and a minimum of 2 shareholders. However, many applications miss this requirement or make mistakes in the shareholding pattern. A common mistake is submitting incorrect values for authorized or paid-up capital, leading to confusion during verification.
How to Avoid It:
Ensure that you meet all basic eligibility requirements, clearly mention the distribution of shares between the shareholders, and ensure the value of the authorized and paid-up capital is accurate. This will ensure that the foundational requirements will not become a barrier to taking your application to the next stage.
Conclusion
Registering your Private Limited Company is more than just a formal step. In fact, it’s your first significant step toward turning your dream into a reality as a business recognized by law. That being said, small mistakes made with documents, signatures, or details can hold you back. Staying educated, adhering strictly to compliance protocols, and securing professional guidance are the most effective strategies for ensuring a smooth, first-time approval.
When you are ready to register your company, trust RegisterKaro to get the process right the first time.
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