What is private limited company ?
What is a private limited company? A private limited company is a type of organisation you can set up to run your business. Company ownership is split into shares owned by shareholders. A company must pay corporation tax out of any profits and can then distribute the remaining profits among shareholders.
From this Section of the Company Act we can obtain following characteristics.
- Characteristics of the Private Limited Company:
- Limitation on Membership:
- Paid-Up Capital:
- Transferability of Shares:
- Name of Company:
- Limited Liability:
- Perpetual Succession:
- Separate Legal Entity:
Advantages of a Private Limited Company
- Separate Legal Entity. An entity means something which has a real existence; a thing with distinct existence. ...
- Uninterrupted existence. ...
- Limited Liability. ...
- Free & Easy transferability of shares. ...
- Owning Property. ...
- Capacity to sue and be sued. ...
- Dual Relationship. ...
- Borrowing Capacity.
There are also some disadvantages:
One of the main disadvantages of a Private Limited Company is that it restricts the transferability of shares by its articles. In a Private Limited Company the number of shareholders, in any case, cannot exceed 50. Another disadvantage of a Private Limited Company is that it cannot issue prospectus to the public.
Required Documents for Registration of Private Limited Company
- Minimum 2 directors
- Pan card
- Aadhaar Card
- Mobile no
- Email id
- Letest Bank statement.
- Utility bills either gas or electricity.
- Passport size photograph.
- Specimen signature - Director's signature on a blank document.
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