Yes. A salaried employee can certainly register a private limited company in India. This is because no provision of Companies Act, 2013, actually stops employed individuals from starting their own private limited company in the country.
However, before doing so, it is important that you check your employment contract as well as your employer's policies. If your job agreement allows it, you can legally register and own a Pvt. Ltd. company while carrying on with your employment.
Many salaried employees choose to register a private limited company. This is because they want to build an extra source of income rather than depending solely on their monthly salary that is paid to them by their employer. They can make money from their business in addition to their job. This can improve their overall financial picture. It gives them a sense of security too.
In today’s time, many companies are downsizing and laying off employees in large numbers. Moreover, many job roles are impacted by AI and automation, especially in the IT sector. In such situations, having your own pvt ltd company means you are not totally dependent on your job. Even if you lose your job one day, you still have a business that you can continue to run as well as grow.
To register a private limited company as a salaried employee, you need to follow the steps we have given below:-
Step 1:- Before starting company registration process, first you need to check your employment contract and your employer's policies to see whether you are even allowed to start your own company. In case your employment agreement does not permit it, you should not proceed before first obtaining your employer's approval. Even if there is no such restriction mentioned, it is still a good idea to confirm directly with your employer in writing. If possible, you should obtain a No Objection Certificate as it will serve as legal proof that you received the permission.
Step 2:- Once you have confirmed that you can register a pvt ltd company from the employer, you can then start collecting all the required documents for the company registration. These generally include the proposed directors' PAN Card, Aadhaar Card, Voter ID or Passport as identity/address proof, Digital Signature Certificate, Director Identification Number and several other important documents required for company incorporation.
Step 3:- Next, you must visit the MCA portal and then file the SPICe+ application form through this portal. Upload all the required documents, digitally sign the application using the DSC and then pay prescribed government fees for SPICe+ form.
Step 4:- After the application is submitted, the Registrar of Companies will examine form carefully so as to verify whether all information and documents meet the legal requirements.
Step 5:- If the Registrar of Companies is satisfied with the application, it will issue the Certificate of Incorporation. The certificate contains the Corporate Identification Number. It serves as proof that private limited company has been legally incorporated and is registered in Ministry of Corporate Affairs’ records.
If you are a salaried employee, you may still have the option to start your own Private Ltd Company. In most cases this will not be a problem so long as it is allowed in your employer’s policies or employment contract. However, having another business could cause legal or disciplinary issues if it is prohibited by your employment agreement. If you need your employer’s approval, try to get it in writing, preferably as a No Objection Certificate as it is legal proof of permission.
In general, employers don’t object if your business has nothing to do with your job. Let’s say you are an IT engineer and you want to start a Private Limited Company for making pickles. However, if your business is in the same industry, targets the same clients or directly competes with your employer, it could cause problems or breach your employment terms.
For professional assistance in starting a private limited company in India, you can avail professional guidance and assistance from our company registration experts at Registrationwala.
Q1. Can a person be an employee and also own a private limited company?
A. Yes. A person can be a salaried employee and also be the owner of a private limited company under Companies Act, 2013. But they need to check their employment contract and employer's policies first. If their employment contract allows it, they can legally do their job and run their own company.
Q2. Which form do I need to file to start a pvt ltd company in India?
A. To start a pvt ltd company in India, you need to file SPICe+ form. You need to file this form online via MCA portal.
Q3. Is it a good idea for a salaried employee to start their own company?
A. Yes. Usually, it can be a good idea for a salaried employee to start their own company. Having a business gives them an additional source of income instead of relying only on their monthly salary. It can also provide better financial security. However, starting a company also involves risks and responsibilities so it is important to plan carefully. Also, it is absolutely necessary for the employee to ensure that their employment contract and employer's policies allow it.
Q4. What are the benefits of registering a pvt ltd co as a salaried individual?
A. There are a number of advantages to registering a private limited company while receiving a salary. It lessens reliance on a single paycheck and offers an extra source of income. Additionally, it offers you the chance to launch and expand a business, which can improve your financial security. If you take out a business loan, you can pay it back with punctual EMIs from your salary.
Q5. Do I need to obtain a CIN for running a pvt ltd company?
A. Yes. In India, every private limited company is required to have Corporate Identification Number, shortened as CIN. The Registrar of Companies automatically allots this number when pvt ltd company is incorporated so you do not need to apply for it separately.
Hi, I'm Sachin Chawla. I’m a commerce graduate from Agra University and a Chartered Accountant (2015) with DISA certification. I focus on helping businesses with formation, management, tax and FEMA matters, business licenses and regulatory compliance, IP advisory, risk management and auditing among others. Through my articles, I aim to share my expertise and provide practical guidance in these areas.
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