How to apply private limited company in India
How to apply private limited company in India
Starting a company in India is very hectic like the registration process and how to access resources related to your business. So here in this blog, we mainly focus on how you can apply to private limited companies in India.
What is a private limited company?
A private limited company is held with limited liability. it ranks among the top business structures in India. It's popular among Indian entrepreneurs. Because it's easy to manage or shareholders are limited. The most important thing in private limited is that only a minimum of two members or two directors are required.
The characteristics of private limited companies are written below.
Protection of liability limited
A private limited company's stockholders are solely accountable for the amount of their ownership. Even if the company experiences financial challenges, its assets are protected.
Independent Legal Body
A private business has its unique legal personality. Under its name, it can enter into agreements, possess property, file lawsuits, and defend them.
Quantity of minimum owners
In a private limited company, a minimum of 2 stakeholders required or the maximum cannot be exceed more than 200 hundred.
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Minimum numbers of Directors.
A minimum of two directors is required for a private limited company.
A minimum of one director must be Indian.
Minimum share capital required
The company needs to maintain a minimum capital of 1 lakh rupees or it can be higher but the minimum is just 1 lakh.
Firm name
The company name must contain Private Limited in its name.
Limitations on Transferring Shares
Within a private limited business, there are limitations on the transfer of shares. Only the Board of Directors permission or as stipulated in the company's Articles of Association may be used to transfer shares.
Prohibition on Public Invitation
It is not permitted for private limited businesses to invite the general public to subscribe for their debentures or shares.
Compliance Requirements
Legal and regulatory requirements for private limited corporations include keeping accurate financial records, holding annual general meetings, and submitting yearly returns to the ROC.
A private limited company is easy to form. It's the choice of an Indian entrepreneur. In India many facilities or resources that the Indian government provides for pvt ltd we can only access it.after the formation of a private limited company.
Document requirement.
For registering a private limited company in India. Shareholder's and directors' documents are required it to be submitted in the MCA website.
For further information proceed with the Vakilsearch website or India filling sites
https://taxguru.in/
Advantages and disadvantages of private limited companies
There are more benefits that you get in a private limited company and its the best company structure in India and it's very flexible and the process of ragistering a private limited firm is easy and faster.
So let's talk about advantages.
Advantages
In private limited there is no minimum capital required. Only 100000 amount required as share capital.
The legal entity of a private limited company is separate or different from owners/directors. Because the company's identity is different like company PAN Card and bank account number, The managers of companies manage the all management in company managers are responsible for hiring people
or responsible for loss and profit.
For private limited companies, it's very easy to get funds from investors and banks or any other financial institution because of legal entity or transparency in GST or other compliance.
Due to its separate entity. Therefore it does not matter whether the company founder is changed or any other region like founder death. it is continued in any cercumstances.until unless changing in members.
FDI (foreign direct investment) There is the rule in private limited companies that any foreign investor can invest money in private limited companies directly without any other Legal formalities. FDI help the companies to grow in nationally or internationally. through FDI its easy to expand the business in the international market.
All the details of private limited companies are available on the MCA website which make companies transparent for Investor or board of directors.
Disadvantages
There is no such disadvantage of private limited companies.
Below are some written
The maximum number of members can be 200 only. But for listed companies, there is no such limitation. Anyone can become a member in publicly listed company.
In private limited shares can not be shared with the public.it means shares cannot be listed on the Stock exchange.
Disclaimer
The content provided here in this blog is informational only. it's not legal advice. Before registering a company consult with a professional lawyer or advocate.
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