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Private Limited Company

A private limited company is a privately-held business entity. It is held by private stakeholders. The liability arrangement in these is that of a limited partnership, wherein the liability of a shareholder extends only up to the number of shares held by them.

With the startup ecosystem booming across the country and more and more people looking to do something on their own, there is a need to be well-acquainted with different business registration types i.e sole proprietorship, limited liability company and private limited company. In this article, we will talk about different sides of a private limited company.

  1. There is a Limited risk to personal assets in Private Limited Company.
  2. Ltd. Co. is a Separate Legal Entity.
  3. In the Private Limited Company there would Limited Liability for members.
  4. Shares of a company limited by shares are transferable by a shareholder to any other person. The transfer is easy as compared to the transfer of interest in business run as a proprietary concern or a partnership
  5. Just as one person can bring a legal action in his/her own name against another in that person’s name, a company being an independent legal entity can sue and be sued in its own name.
  6. A company has ‘perpetual succession’, that is continued or uninterrupted existence until it is legally dissolved.
  7. For a private company, the earlier minimum number of the share capital was Rs. 1,00,000, but now there is no such minimum capital compulsion. Therefore there is no pressure of fund requirements.
  1. Higher Administration Costs
  2. Limited Personal Control
  3. Restricts The Transfer Ability Of Shares
  4. Members In Any Case Cannot Exceed 200
  • Obtain digital signature: -A company before incorporation must apply for digital signature. A digital signature is required to copy all the documents and certificate..
  • Obtain director identification number: Under sec 159 of the companies act it is required for every director to obtain an identification number from central government. Name approval: Every company must think of a unique name for its company. Every company has to submit the list of 5-6 names in accordance with the preference to ROC i.e. registrar of the company
  • Preparation of MOA and AOA: Memorandum of association and articles of association must be prepared by the company. MOA is a document containing the objective and powers of the company.
  • Application for the incorporation: After completing all the above-mentioned steps you can file an application for incorporation of the company. The application should be filed with the registrar of the company with form 7 and form 22. Form 7 is a detailed statement about company’s memorandum of association and articles of association. Proof of residential address, proof of identity, NOC if there is the change in promoters, pan card should also be attached with the application.
  • Receiving the certificate: If after the filing of all the above documents the registrar is satisfied with all the documents then he will issue a certificate of incorporation in form 11. After receiving this certificate the company can move to other steps in formation of the company

All about Private limited Company

Private limited

As the name suggests, a private limited company is a privately-held business entity. It is held by private stakeholders. The liability arrangement in a private limited company is that of a limited partnership, wherein the liability of a shareholder extends only up to the number of shares held by them. The shareholders cannot be held liable beyond the value of the shares. The governing body for such a company is the Ministry of Corporate Affairs (MCA).


Section 2 (68) of the Companies Act, 2013 defines a private company as:

“A Company having a minimum paid-up share capital as may be prescribed, and which by its articles,—

  • Restricts the right to transfer its shares;
  • Except in case of One Person Company, limits the number of its members to two hundred;
  • Prohibits any invitation to the public to subscribe for any securities of the company.”


Disadvantages of Private limited 

  • Registration Process Private limited company registrationon average takes about 10 – 20 days. Hence, registering a private limited company involves a process and costs which are not applicable to an unregistered entity like proprietorship. However, once registered, the private limited company enjoys a wide variety of powers and rights, making the process for opening bank account or getting a payment gateway, easy. Proprietorship or partnership firms often encounter difficulty post registration while having to open a bank account or obtain a payment gateway, as they are considered to be unregistered business entities.
  • Compliance Formalities: A private limited company requires a range of compliance post incorporation. All companies are required to hold board meetings, general meetings, get the accounts audited, maintain a statutory register and file an annual return with the Ministry of Corporate Affairseach year. In addition to the corporate compliance formalities, a company would also have to maintain compliance with tax and labor laws, which are applicable irrespective of the type of business entity.
  • Division of Ownership: A major disadvantage of a private limited company is that it requires a minimum of two persons to act as Directors and shareholders. So, any sole entrepreneur who wishes to start and operate a business by him/herself cannot start a private limited company. Hence, any major decision to be taken by a company would always require the consent of two persons. The company would also need to have two shareholders, even if one person holds a negligible amount of shareholding.




INR 1,500/-

One Time Fee

  • GST Registration
  • MSME Registration
  • Bank A/c.

Service Provide Within 7 Days


INR 11,999/-

One Time Fee

  • GST Registration
  • Shop & Establishment Registration
  • MSME Registration
  • Trade Mark Registration
  • Logo Design
  • Opening Bank A/c.

Service Provide Within 15 Days


INR 11,999/-

Yearly Fee

  • Yearly GST Compliances
  • Income Tax Return

Services Provided Before the Due Date

Frequently Asked Questions

Yes, you need a minimum of two Directors for a Private Limited Company. If you are the sole owner, you can register as a One Person Company.

Any individual person and an organization can become the member of the Private Limited Company including foreigners/NRI

The entire procedure is 100% online and you don’t have to be present at our office or any other office for closure of proprietorship & incorporation of private limited. A scanned copy of documents has to be sent via mail.

There is absolutely no other payment. We will send you an invoice that is all-inclusive, with no hidden charges can convert Proprietorship into Private Limited Company typically in 14-20 days. The time taken also depends on relevant documents provided by the applicant and speed of approvals from government. To ensure speedy registration, please pick a unique name for the proposed Company and make sure you have all the required documents ready, prior to starting the registration process.

Yes, an NRI or Foreign National can become a Director in a Private Limited Company on acquiring DIN. However, at least one Director on the Board of Directors must be a Resident of India.