What is Private Limited Company?
Private Limited Company is a popular Business vertical in India for all Businesses.
A private limited company shall have a minimum of two members and a maximum of two hundred members.
A private limited company shall have a minimum of two directors and a maximum of fifteen directors.
As per section 2 (68) “private company” means a company having a minimum paid-up share capital as may be prescribed, and which by its articles,-
(i) restricts the right to transfer its shares;
(ii) except in case of One Person Company, limits the number of its members to two hundred: Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:
Provided further that—
(A) persons who are in the employment of the company; and
(B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and
(iii) prohibits any invitation to the public to subscribe for any securities of the company;
Documents/Checklist for a Private Limited Company
Copy of Aadhar
Copy of PAN
Driving License OR Voter ID card OR Passport
Bank Account Statement Updates
Mobile Number
Email ID of all promoters and directors
Passport Size Photograph of all promoters and directors
Address Proof for Registered Office (Electricity Bill not more than 1 month)
Name of Company
Qualification of Promoter
Paid-up Capital of Company
Specimen Signature of One Director
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Benefits of the Private Limited Company
Limited liability
A company limited by shares is a registered company having the liability of its members limited to the amount, if any, unpaid on the shares respectively held by them. If his shares are fully paid-up, he has nothing more to pay.
Perpetual Succession
An incorporated company never dies. Perpetual succession, therefore, means that the membership of a company may keep changing from time to time but does not affect its continuity. Members may come and members may go out but the company can go forever.
Separate Management
The members of a company may derive profits without being burdened with the management of the company. The company is administered and managed by its own managerial personnel.
Transferability Of Shares
The capital of accompany is divided into parts called shares. The shares are said to be moveable property and subject to certain conditions, freely transferable for that. No shareholder is permanently or necessarily wedded to a company. It may be noted that this right of shareholder is restricted in the case of a private company.
Capacity To Sue And Be Sued
A company limited by shares is a registered company having the liability of its members limited to the amount, if any, unpaid on the shares respectively held by them. If his shares are fully paid-up, he has nothing more to pay.
Contractual Rights
A company, being a legal entity different from its members, can enter into contract for the conduct of the business in its own name. A member of a company cannot sue in respect of torts committed against it, nor can be sued for torts committed by the company.
Separate Property
No member can claim himself to be the owner of the company’s properties either during its existence or in its winding up. A member does not even have an insurable interest in the property of the company.
Perpetual Succession
It has the existence only in contemplation of law. It is created by law, carries on its affairs according to law throughout its life and ultimately is affected by law. Generally, existence of a company is terminated by means of winding up.