A private limited company is an organization which is secretly held for independent ventures/company. The obligation of the individuals from a Private Limited Company is constrained to the measure of offers separately held by them. All the information about Private Limited Company is talked about in the article.
Area 2(68) of Companies Act, 2013 characterizes privately owned businesses. As indicated by that, privately owned businesses are those organizations whose articles of association confine the limit the exchange capacity of shares and restrict them to buy or subscribes. There are many characteristics of a private company.
Below are some features of a public company which differs it from Public companies:
- Private Limited Company should have included Pvt. Ltd at the end of their company name.
- In Private Limited Company, no minimum share capital is required.
- Private Limited Companies don’t have permission to transfer their share freely unlikely public companies
- Private Limited Companiescan hire a minimum of 2 employee and maximum 200 in their company
Types of Private Limited Company
Well, there are three types of Private Limited Companies
- Limited by shares, the risk of the individuals is highly controlled to the sum unpaid to the organization regarding the shares held by them.
- Limited by guarantee, here the individuals’ liabilities are restricted to the measure of cash they certification to pay on the off chance that the organization is beating up.
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- Unlimited liability, the risk of individuals is boundless in this kind of privately owned businesses. Owned resources of individuals can be connected and sold when the organization is being beaten up.
Different requirements of Private Limited Company
- Members should be in between 2 to 200
- Minimum two directors are must and every director should have DIN i.e. Director Identification number
- Name should have included Pvt. Ltd on the end of the company’s name
- Registered office address is a must.
- Digital signature certificate is also must require in the digital world
- Professional certificate is also needed like CA, secretary and many more
Various advantages of Private Limited Company
Incorporated association, an organization is made when it is enrolled under the Companies Act. It appears from the date referenced in the certificate of joining. As per the MCA’s company act, Company which owned more than two employees should be registered with full name.
Legal person, well companies are not a person. These are registered under the law and cannot work as their own because it must require some legal person to run it which are chosen by shareholders. These persons are called directors of the board.
Separate Legal entity, an organization has a lawful particular substance and is independent of its individuals. The loan company of the organization can collect their money just from the organization and the property of the organization. They can’t sue singular individuals who are part of the company.
Ceaseless Existence, an organization is a steady type of business association. Its life does not rely on the passing, indebtedness or retirement of any or all shareholder or executive. Law makes it and law alone can break up it. Individuals may come and go however the organization can continue forever
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Common Seal/stamp, an organization not being a person can’t sign on the documents unlikely human person. It acts through a characteristic individual who is called its executives/directors. Be that as it may, having a legitimate character it very well may be bound by just those records which bear its sign. Along these lines, the law has accommodated the utilization of regular seal, with the name of the organization engraved on it, as a substitute for its signature.
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To conclude Private companies are totally different from public companies and a private company is registered association under the company act of government which is artificial legitimate individual, having a free lawful, element with a ceaseless progression, a typical seal for its signs, a typical capital comprised of transferable shares and conveying highly controlled risk.
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Chartered Accountant by profession, CA Sanket Agarwal has an experience of above11 years in Cross Border compliance , Import Export , International Taxation & is a passionate content creator.