A private limited company is a company which is privately held for small businesses. The liability of the members of a Private Limited Company is limited to the amount of shares respectively held by them. Shares of Private Limited Company cannot be publically traded. The minimum number of members is two and maximum number is two hundred. A private limited company has the limited liability of members but at the same time it has many characteristics as those of a partnership firm. A Private limited company stands between partnership and widely owned public company. Identifying marks of a private limited company are name, number of members, shares, formation, management, directors and meetings, etc., The maximum number of directors shall have to be mentioned in the Articles of Association. In the grand of privileges and exemptions, the Companies Act has drawn a distinction between an independent private company and other private company which is a subsidiary to the other public company.
Separate Legal Entity
A company is a legal entity and an artificial person established under the Act. Therefore this form of organization has extended legal capacity and can own property and also incur debts. The members (Shareholders/Directors) of a company have no liability to the creditors of a company for such debts except to the tune of capital invested in the company.
A company has ‘perpetual succession’, that is continued until it is legally dissolved or wound up. A company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in shareholding / membership.
A company enjoys better avenues for borrowing of funds. It can issue debentures, secured as well as unsecured and can also accept deposits from the public, etc. Even banking and financial institutions prefer to offer financial assistance to a company over partnership firms or proprietary concerns.
Shares of a company limited by shares are transferable by a shareholder to any other person. Filing and signing a share transfer form and handing over the buyer of the shares along with share certificate can easily transfer shares (Form SH-4 is the current designated form for transfer of shares).
A company being a juristic person, can acquire, own, enjoy and alienate, property in its own name. No shareholder can make any claim upon the property of the company so long as the company is a going concern entity.
Limited Liability means the status of being legally responsible only to a limited amount for debts of a company. Unlike proprietorships and partnerships, in a limited liability company the liability of the members in respect of the company’s debts is limited.
- iNext can incorporate a Private Limited Company in 7 to 10 days, subject to ROC processing time.
Obtaining DSC & DIN
- Digital Signature Certificate(DSC) and Designated Partner Identification Number(DPIN) is required for the proposed Partners of the LLP. DPIN and DSC can be obtained for the proposed Partners within 2-3 days.
- A minimum of one and a maximum of two proposed names must be submitted for RUN (Reserve Unique Name)to the MCA. Subject to availability, naming guidelines and MCA processing time, Name Approval can be obtained in 2 to 3 business days.
- Registration documents can be submitted to the MCA along with an application for registration. MCA will usually approve the application for incorporation in 5 to 7 days, subject to their processing time.
- ID Proof and Address Proof (Aadhar) for all Partners. as id proof PAN Card is Mandatory.
- latest utility bill (electric bill/telephone bill) or latest tax receipt/ownership deep of the property for the property to be used for registered office.
- Private limited company registration with DSC, DIN, name approval, incorporation fee, PAN, TAN, share certificates and company kit.
- Private limited company registration with DSC, DIN, name approval, incorporation fee, PAN, TAN, share certificates, company kit and 10 lakh authorised capital.
- Private limited company registration with DSC, DIN, name approval, incorporation fee, PAN, TAN, share certificates, company kit, 10 lakh authorised capital and trademark