Is it always necessary to step outside one’s comfort zone in order to achieve success? If one could stay at home and build a great business right from home, does that sound too good to be true? This is very much doable, as it turns out!
Entrepreneurship is often chosen by commoners as a means of freedom and autonomy. By requiring a corporate office or a commercial space to house such a business would dilute the essence of entrepreneurship.
It is also true that most start-ups lack the deep pockets to invest in a commercial setup in order to get their businesses off the ground. As a start-up business, renting or buying a space can be costly, not to mention the costs associated with registering the company.
Moreover, since most businesses have gone online and contactless, most entrepreneurs don’t even think about having a physical office anymore. Many businesses choose to start their businesses right in their own living rooms, rather than in sophisticated office spaces, which is only natural. However, there is doubt about whether the company could register its office in their residential space when it was incorporated.
Is It Possible to Form A Private Limited Company from Home: Registered Office of a Private Limited Company:
In essence, a registered office is where a company’s business affairs are conducted. The official address is that of the legal entity in which the business is incorporated, such as a limited liability company or LLP.
While making an application for registering a private limited company, the official address of the company to be registered has to be mentioned and the same has to be substantiated with the required documents as the address proof.
Documents Required to be Furnished as Proof of Address:
When making an application for the registration of a private company, the following documents must be attached as proof of address:
- The application must be accompanied by utility bills that are not older than three months on the date of application, such as phone bills, electricity bills, and water bills
- A duly notarized rental agreement
- Recipients of rentals
- The sale deed or property deed, if the property is owned
- It is necessary to have a letter of authorization from the owner if the property is rented to the company.
Is it Possible to Register a Private Limited Company with a Residential Address?
Yes, it’s true! Any business can register if the space is suitable. There is no mention of one’s residence as a business location in the Companies Act, 2013. A private company can be registered by providing the stipulated proof of the business’s address. The registered office’s address of a private company can therefore be replaced by a business owner’s residential address.
However, for rented properties, a NOC is required. If the proofs presented are satisfactory, the MCA (Ministry of Corporate Affairs) grants the certificate of incorporation. The company’s registered office is frequently a residential address. The company then establishes one or more branch offices if required for carrying out the business. Private limited companies may establish branch offices at alternate addresses if necessary.
The address of the registered office is usually the address of the entrepreneur’s residence, since it is permanent. Once a company is incorporated, it wouldn’t be necessary to change addresses afterward. A start-up is always inherently unstable and uncertain in the early days until it has stabilized and been allocated permanent office space.
Merits and Demerits of Registering a Private Limited Company with Residential Address:
Even though it might seem straightforward for pvt company registration with a residential address, it has its own advantages and disadvantages.
- It is not expensive to build or rent a private space exclusively for business purposes and is easy on the pocket for the business owner
- The authorized person would receive any communication sent to the registered office, preventing information from going missing and preventing fraud.
- Changing the place of business is convenient, but the address of the registered office remains the same, so the cumbersome process of constantly changing the registered office address will be avoided.
- The use of a residential address makes GST registration and other such formalities easier.
- A breach of privacy occurs when the residential premises are used for business purposes
- Businesses that are registered under the Shops and Establishments Act may have higher taxes than those registered under the Shops and Establishments Act because they belong in a commercial space
- Clients may not be satisfied with the infrastructure of one’s own house as a business place and may not consider it credible
A private limited company can be incorporated in one’s own home under the Companies Act, 2013, which offers several emoluments to new entrepreneurs. For those contemplating starting a business, this would certainly give them a push.
A residence address can have both advantages and disadvantages depending on the particular case, but for establishing a private limited company, it is definitely an advantage.