Private Limited Company
Private Limited Company is the most preferred and popular way of starting a business in India. A private company is eligible to take benefit of registration under Start-up India Scheme of Government of India. This scheme avails multiple benefits including tax exemptions for the recognised start-ups. Being a separate legal entity from its members/ directors, this makes it more suitable for external funding options.
Private Limited Company can be started with a minimum of two members having no minimum paid-up share capital. The limitations of a private limited company is described through its articles are:-
(i) restricts the right to transfer its shares i.e. the shares of Private Limited Company shall not be publically traded;
(ii) except in case of One Person Company, limits the number of its members to two hundred;
(iii) prohibits any invitation to the public to subscribe for any securities of the company.
Types of Private Limited Company:
Private Limited Company in India are of 3 types:
1. company limited by shares- the liability of the shareholders in the private limited company is restricted to the paid-up share capital or any amount that remains unpaid.
2. Company limited by guarantee- The liability of such a member is limited to the extent of his guarantee. The guarantee given by a member can only be called at the time of winding up of the company. This type of company is best suitable for clubs, trade associations, societies etc that requires minimal capital or working capital funds.
3. Unlimited Company- The liability of the members in such companies is unlimited. It means that their personal assets can be utilized to pay off company’s debts and liabilities.
Conclusion: There are many types of Private Limited Company, but most preferable for the business purpose is Private Limited Company– Limited by Shares.
Registration of Private Limited Company
1. ASK Commercial Solutions can help you with company registration across India hassle free and at a very competitive price. We have a team of qualified company secretaries and chartered accountants, who ensure highest customer satisfaction and timely delivery of service.
2. For hassle free registration, submit all required documents to our mail id or can contact us for any further query.
3. Know about documents required for Private Limited Company registration; Click here
Advantage of Private Company Registration :
Separate legal entity.
Limited liability for members.
Company has ‘perpetual succession.
No such minimum capital compulsion.
A company can sue and be sued in its own name.
No pressure of fund requirements for minimum capital.
Company limited by shares are transferable by a shareholder to any other person.
Disadvantage of Private Company Registration :
It restricts the transfer ability of shares by its articles.
Number of members in any case cannot exceed 50.
It cannot issue prospectus to public.
Shares cannot be quoted.
Compliances of Private Limited Company:
Private Limited Company requires to file audited financial statements with the Ministry of Corporate Affairs at the end of each Financial Year like all types of Companies.
In addition to Annual compliance, there are some event-based Compliance to be followed in case of occurrence of certain specified events also as per law.
It can also say that relatively high compliances as compared to a One Person Company but much less compliances as compared to Public Limited Company.
Role of ASK Commercial Solutions
ASK Commercial Solutions can help you with company registration across India hassle free and at a very competitive price. We have a team of qualified company secretaries and chartered accountants, who ensure highest customer satisfaction and timely delivery of service.