Private Limited Company Eligibility: Who Can Be a Director or Shareholder, and How Many You Need
A Private Limited company needs at least 2 directors and 2 shareholders, and can have up to 15 directors and 200 shareholders. At least one director must be an Indian resident (182+ days in the previous year). The same two people can be both directors and shareholders. There is no minimum capital, and every director needs a DIN and a DSC. See the full registration guide.
Who is eligible to start a Private Limited company?
Any two adults, each holding at least one share, can form a Private Limited company in India, provided at least one of the directors is a resident of India. Nationality of the shareholders does not matter, and there is no minimum capital requirement.
Take Ananya, a UX designer in Pune, and her cousin Rohit, who works in Dubai. They want to start a design studio with ₹5 lakh of authorised capital. Ananya can be the resident director, Rohit can be a second director and shareholder from abroad, and both can hold shares. That combination is legal, provided Ananya meets the resident-director test explained below.
The rest of this guide gives the exact minimums and maximums, explains the resident-director rule, and shows who can hold which role. Where a different structure would suit you better, we say so. If you would rather have a Chartered Accountant confirm your specific setup, the free callback on the Private Limited registration page is the fastest way.
How many directors and shareholders does a Private Limited company need?
A Private Limited company needs a minimum of 2 directors and 2 shareholders, and it can have a maximum of 15 directors and 200 shareholders. The director range comes from Section 149(1) of the Companies Act, 2013, and the shareholder limit comes from the definition of a private company in Section 2(68).
| Requirement | Minimum | Maximum |
|---|---|---|
| Directors | 2 | 15 (more only by special resolution) |
| Shareholders (members) | 2 | 200 |
| Resident directors | 1 | No upper limit |
| Paid-up capital | None | None |
The limits are as of September 2026. A company with more than 15 directors is possible, but it needs a special resolution passed by the shareholders, which most startups never need.
If you are a solo founder, you cannot use this structure with one person alone. A One Person Company allows a single member, and our comparison of Private Limited vs LLP vs OPC explains when that fits better.
What is the resident director rule?
At least one director of a Private Limited company must be a person who has stayed in India for 182 days or more in the previous year. This is required by Section 149(3) of the Companies Act, 2013, and it applies to the board as a whole, not to every director.
Two points are worth knowing. First, this is about days spent in India, not citizenship. A foreign national who lives in India long enough can count, and an Indian citizen who lives abroad may not. Second, sources describe the "previous year" slightly differently (some say financial year, some say calendar year), so your CA should confirm which count applies to your director's travel history before you file.
A newly incorporated company gets a relaxation for its first year, because there is no full previous year to measure. After that, the board must always include a qualifying resident director. If your only resident director leaves or falls below 182 days, the company has to fix the gap, so plan a second resident director if your co-founders are mostly abroad.
- Founders all in India: no issue, everyone counts.
- One founder in India, one abroad: the India-based founder is your resident director.
- All founders abroad: you need a resident director. This is a common problem, and the guide for NRIs and foreign nationals covers the options.
Can directors and shareholders be the same people?
Yes, the same people can be both directors and shareholders of a Private Limited company, and this is how most small companies run. A company does not need separate outside directors or outside shareholders to be valid.
The two roles are still legally different. Directors manage the company and owe duties to it. Shareholders own it and vote on major decisions such as changing the charter documents. In a two-founder company, each founder usually holds both roles, with ownership split by shares held (for example 60:40 or 50:50).
The roles do not have to overlap. You can appoint a director who holds no shares, for example a professional who brings experience. You can also have shareholders who are not on the board, such as a family member or an early investor. Founders who plan to raise money later often keep this in mind, and the guide for startups explains how equity and board seats interact with fundraising.
One practical point: with a 50:50 split and only two directors, decisions can deadlock. Some founders add a third director early or agree on how ties are resolved in the Articles of Association. Ask your CA to write that in at the drafting stage rather than after a dispute.
A Chartered Accountant will confirm your directors, shareholders and resident-director position on a free callback.
Start Private Limited registration →Who can hold what? A quick eligibility table
Most adults and legal entities can be shareholders, but only individuals can be directors, and one director must be a resident. The table below summarises who can hold which role as of September 2026.
| Person or entity | Can be a director? | Can be a shareholder? | Note |
|---|---|---|---|
| Resident Indian adult | Yes | Yes | Can be the resident director |
| NRI (Indian citizen abroad) | Yes | Yes | Cannot be the resident director unless he or she stayed 182+ days in India |
| Foreign national | Yes | Yes | Sector rules on foreign investment apply; documents need notarisation or apostille |
| Indian company or LLP | No, only individuals | Yes | Can hold shares as a body corporate |
| Minor | No | Generally no as a first subscriber | Ask your CA about later holdings through a guardian |
A person who is legally disqualified from being a director, for example after certain company-law defaults, cannot be appointed even if everything else fits. Tell your CA about any past directorships in struck-off or defaulting companies before you start.
What does every director need before filing?
Every director needs a Director Identification Number (DIN), a Digital Signature Certificate (DSC), a PAN and Aadhaar or another valid identity and address proof. The DIN is a unique number issued by the Ministry of Corporate Affairs, and the DSC is the electronic signature used to sign the incorporation form.
- DIN: for a first-time director, DIN can be applied for inside the incorporation form itself. Currently up to 3 directors can get their DIN this way. Extra directors are added afterwards.
- DSC: a Class 3 certificate, usually valid for 1, 2 or 3 years. Prices vary by provider and validity, and roughly ₹1,000 to ₹2,500 per certificate is a fair range.
- Identity and address: PAN, Aadhaar and a recent photo. Names must match across documents, which is a frequent cause of rejection.
After incorporation, DIN holders must keep their KYC current. Under amendment rules effective 31 March 2026, DIR-3 KYC is required once every three financial years rather than annually. Missing it can deactivate the DIN. Our documents-required guide lists exactly what to scan and upload.
What about foreign nationals and NRIs as directors or shareholders?
Foreign nationals and NRIs can be directors and shareholders of an Indian Private Limited company, and foreign investment up to 100% is generally allowed under the automatic route, except in prohibited or capped sectors. A resident director from India is still required on the board.
The paperwork is heavier. Documents executed abroad, such as identity proof and signed charter documents, usually need notarisation and, depending on the country, an apostille or Indian consular attestation. Business visa or OCI proof may also be needed, and the incorporation form is filed with these attachments. Any shares allotted to a non-resident must later be reported to the RBI through your bank.
All of this is covered in our guide to registration for NRIs and foreign nationals. If the foreign parent is an existing company, an Indian subsidiary structure may be the better fit.
How does Shunya check your eligibility before you pay?
A practising Chartered Accountant reviews your director and shareholder details before filing, including the resident-director rule, PAN and Aadhaar name matches and the split of shares. The professional fee is a flat ₹1,999, with government fees and state stamp duty billed separately at actual cost and confirmed for your state and capital before you pay anything beyond the professional fee.
The CA also handles the DSC, DIN, drafting of the MOA and AOA, and the SPICe+ filing (with AGILE-PRO-S), then delivers your Certificate of Incorporation, PAN and TAN. Standard turnaround is 7 to 10 working days for a standard incorporation. If it takes longer than 15 working days from the date you submit complete documents, the professional fee is waived.
If one of your co-founders is unsure whether they qualify, request the free callback and share the details. You will get a clear yes or no, and where a Private Limited company is not the right fit, you will be pointed to an LLP or OPC instead.
How many directors are needed for a Private Limited company?
A Private Limited company needs a minimum of 2 directors and can have up to 15. More than 15 is possible only with a special resolution of the shareholders. At least one director must be a resident of India, meaning someone who stayed in India for 182 days or more in the previous year.
How many shareholders can a Private Limited company have?
A Private Limited company needs at least 2 shareholders and can have at most 200. Beyond that number the company would no longer qualify as a private company. Shareholders can be individuals or legal entities such as another company, and they may or may not also be directors.
Can two people be both directors and shareholders?
Yes. Two founders can be the only two directors and the only two shareholders, which is the most common setup for a small company. The roles remain legally distinct, so your MOA and AOA should clearly say who holds how many shares and how board decisions are taken.
Do I need a minimum capital to register a Private Limited company?
No. There is no minimum paid-up capital requirement, because the earlier ₹1 lakh floor was removed in 2015. You still choose an authorised capital and allot shares to the subscribers. The MCA charges no incorporation filing fee up to ₹15 lakh of authorised capital, but state stamp duty applies.
Can a foreign national or NRI be a director of an Indian Private Limited company?
Yes, foreign nationals and NRIs can be directors and shareholders, but at least one director on the board must be a resident of India. Foreign investment is generally allowed up to 100% under the automatic route, except in prohibited or capped sectors, and documents signed abroad need notarisation or apostille.
Can a minor be a director of a Private Limited company?
No. A minor cannot be a director or a first subscriber to the MOA, because directors must be adults who can enter binding contracts and obtain a DIN. If you want a child to hold equity later, ask your CA to structure it properly through a guardian rather than at incorporation.
This article is for general information only. For your specific situation, consult a practicing CA.
Ready to register your Private Limited?
Request a free callback or pay the ₹1,999 professional fee online and a CA starts your filing. Government fees and stamp duty are billed separately at actual cost.
Professional fee ₹1,999. Government fees and state stamp duty are billed separately. Turnaround is 7–10 working days; the professional fee is waived if it takes longer than 15 working days from the date you submit complete documents.