What is a private limited company?

A private limited company is a business entity held privately by shareholders. The liability is limited to the shares held by shareholders.

Mandatory requirements

• Minimum of two members and a maximum of 200 according to the statutory requirement of the Companies Act 2013.
• Each of the company directors should have a DIN(director identification number).
• Among the directors, one should stay in India for not less than 182 days in the previous calendar year
• The name of the private limited company should vary from other PLC names.
• Certificates by the professionals associated with private limited companies. Such as chartered accountant, secretary cost, accountant, etc
• The company's principal address.

Advantages of private limited companies

• The private limited company is a separate legal entity which means shareholders are not responsible for the company's assets and liabilities.
• Shareholders' liability is limited and responsible for the shares held by them. They do not have the personal risk of paying debts out of their assets.
• As the company is a separate legal entity, it is not affected by the death or cession of a member from a company. It can continue its existence until it dissolves legally.
• No minimum capital is required as the company can register with the amount of 10000 as a total of authorized share capital.
• A Private Limited company can raise funds from venture capital or Angel markets.
• A private limited company's shares can easily be transferable by a shareholder to any other person.
• 100% FDI is allowed in a private limited company which means foreign investors can invest in the private limited companies directly.

Disadvantages

• A limited number of shareholders and members
• In a private limited company, the number of shareholders should not exceed 50, and members should not exceed 200.
• Restrictions on the transfer of shares and the stock exchange cannot display the PLC shares.
• It cannot allow the issuance of prospects to the public.

Documents required for Private Limited Company Registration

• ID proof PAN card and passport of Indian and foreign directors
• Address proof
  • ration card or
  • aadhar card or
  • driving license or
  • voter ID
• Residential proof
  • bank statement
  • electricity
  • utility bill
• Certified rental agreement
• NOC from the landlord
• Copy of sale deed or property deed

The Procedure of Private Limited Company Registration