Private Limited
Private Limited Company
A private limited company is a company that is a privately-held business entity for running the business. Mostly share held by private or known stakeholders. The liability of the company is limited according to its share held by members.
Most startup companies are incorporating a private limited company for running the startup and enjoying the benefit of a private limited company
Following is the benefit of a private limited company
- There is a Limited risk to personal assets in a Private Limited Company.
- Ltd. Co. is a Separate Legal Entity.
- In the Private Limited Company, there would be Limited Liability for members.
- Shares of a company are limited by shares and shares are transfer to any other person by the shareholders. The transfer is very easy as compared to the transfer of an interest in a business run as a proprietary concern or a partnership
- Just as one person company can take legal action in his/her own name against another in that person’s name, a company being an independent and legal entity can sue and be sued in its own name.
- A company has ‘perpetual succession, which is continued or unbroken until it is legally dissolved.
- For a private limited company, the earlier minimum number of the share capital was Rs. 1,00,000, but at this time there is no such minimum capital compulsion. Therefore there is no pressure on minimum fund requirements.
Following are the disadvantages of a private limited company
- Higher Administration Costs
- Limited Personal Control
- Restricts The Transfer Ability Of Shares
- Members, In Any Case, Cannot Exceed 200
Following are the requirement of a Private Limited Company
- Obtain digital signature: -A company must apply for a digital signature, before the incorporation of the company. A digital signature is required to copy all the documents and certificates.
- Obtain director identification number: Under sec 159 of the companies act it is required for every director to obtain an identification number from the central government.
- Name approval: Every company must think of a unique name for its company. Every company has to submit a 5-6 names list in accordance with the preference to ROC i.e. registrar of the company
- Preparation of MOA and AOA: The company prepares a Memorandum of association and articles of association. MOA is a document containing the objectives and powers of the company.
- Member KYC Documents: Obtain necessary documents related to Member, a subscriber to MOA, other necessary documents.
- Application for the incorporation: After completion of previous steps an application for incorporating can be submitted to ROC [Registrar of company ] for incorporation of the company.
Receiving the certificate: If after the filing of mentions all the above documents, the registrar is satisfied with all the filing documents then he will issue a certificate of incorporation in form 11. After receiving this certificate the company can move to other steps information of the company
All about Private limited Company
Private Limited Company
A private limited company is a company that is a privately-held business entity for running the business. Mostly share held by private or known stakeholders. The liability of the company is limited according to its share held by members.
Most startup companies are incorporating a private limited company for running the startup and enjoying the benefit of a private limited company
Following is the benefit of a private limited company
- There is a Limited risk to personal assets in a Private Limited Company.
- Ltd. Co. is a Separate Legal Entity.
- In the Private Limited Company, there would be Limited Liability for members.
- Shares of a company are limited by shares and shares are transfer to any other person by the shareholders. The transfer is very easy as compared to the transfer of an interest in a business run as a proprietary concern or a partnership
- Just as one person company can take legal action in his/her own name against another in that person’s name, a company being an independent and legal entity can sue and be sued in its own name.
- A company has ‘perpetual succession, which is continued or unbroken until it is legally dissolved.
- For a private limited company, the earlier minimum number of the share capital was Rs. 1,00,000, but at this time there is no such minimum capital compulsion. Therefore there is no pressure on minimum fund requirements.
Following are the disadvantages of a private limited company
- Higher Administration Costs
- Limited Personal Control
- Restricts The Transfer Ability Of Shares
- Members, In Any Case, Cannot Exceed 200
Following are the requirement of a Private Limited Company
- Obtain digital signature: -A company must apply for a digital signature, before the incorporation of the company. A digital signature is required to copy all the documents and certificates.
- Obtain director identification number: Under sec 159 of the companies act it is required for every director to obtain an identification number from the central government.
- Name approval: Every company must think of a unique name for its company. Every company has to submit a 5-6 names list by the preference to ROC i.e. registrar of the company
- Preparation of MOA and AOA: The Company prepares a Memorandum of association and articles of association. MOA is a document containing the objectives and powers of the company.
- Member KYC Documents: Obtain necessary documents related to Member, a subscriber to MOA, other necessary documents.
- Application for the incorporation: After completion of previous steps an application for incorporating can be submitted to ROC [Registrar of company] for incorporation of the company.
Receiving the certificate: If after the filing of mentions all the above documents, the registrar is satisfied with all the filing documents then he will issue a certificate of incorporation in form 11. After receiving this certificate the company can move to other steps information of the company
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Frequently Asked Questions
Yes, a small business can incorporate its business under private limited company registration in India. It provides them with the credibility, assurance, and an image of their business before financial institutions, suppliers, and potential clients. It helps the company to get the funding, Business loans at minimum compliance from banks or potential clients while entering into the deals.
- No, professional or educational qualification is required to become a shareholder in a private limited company. Any individual in the capacity of the person, with the sound of mind, can start a company.
A person who wants to become director of the company has to first apply for DIN through the Ministry of Corporate Affairs and submit the required documents related to Identity and Address Proof. Once the Ministry verifies these documents, the DIN will be allotted to the person
Any address whether it’s own or rented/leased premises, and where a company holds Annual general meeting, for keeping audited books of accounts and other correspondence from all the statutory/government authorized. The registered office of a company determines the jurisdiction of for registrar of the company.
Yes, A company can change its registered office at any time by following the specified procedure. It can be within the same state or a different state.
Ans: MOA Mean for Memorandum of Association whereas AOA means Articles of Association. Both these documents act as an important source of information for various shareholders and other stakeholders associated with a Company.
MOA, reveals the name, aims, objectives, registered office address, the clause regarding limited liability, minimum paid-up capital, and share capital of the Company. In short, it explains the relationship of a Company with the outside world.
AOAs are the necessary documents to be submitted when the company is incorporated with the Registrar of Companies (ROC). When AOAs are in conjunction with the MOA, they are called the Constitution/Rule and Regulation of the Company
Yes, Rule 27 of Companies (Management & Administration) Rules 2014 says that A Listed Company or a Company having more than 1000 Shareholders shall maintain Records in Electronic Format. However, all the other companies are required to maintain statutory records in the form of registers, minutes, etc. throughout its life.
Definition of a small company has been changed with effect from 1st April 2021, According to Section 2(85)(ii)(i) of the companies Act, 2013, paid-up capital and turnover of the small company shall not exceed Rs. 2 crores and Rs. 20 crores respectively.
It mean is same and similar as WTD Whole-time Director in The Company, WTD is defined in section 2(94) of Companies Act, 2013