What is a private limited company?

A company is a form of business organization that is set up under the law. In India, the companies come under the ambit of the Companies Act 2013. The act identifies two main categories of the companies “ public company and Private Company”.

A private company is a company that is owned and managed by a small group of persons and mostly by their private funds. The Companies Act defines a private company as a differentiation between public and private companies. Section 2(68) of the act defines a private company, " private company" means a company having a minimum paid-up share capital as may be prescribed, and which by its articles

(I) Restricts the right to transfer its shares;

(ii) Except in case of One Person Company, limits the number of its members to two    hundred

The act states that a private company has to mention the word ' private limited or in short PVT. LTD. " in their name for their identification as a private company. And differentiate it from other types of companies.


Advantages of a Private Limited Company

A company form of organization enjoys a better image than a sole proprietor type of business organization for the reason it is registered under the law. The main benefit of a company is that it is a spate legal entity from its owners which means the assets and liabilities of a company are of a company only and not of the owners of the company. Investors and banks are more likely to provide funds as compared to the sole proprietor business. The company form of business enhances the level of business operations.

A private company is owned privately by a small group of persons. The funds invested in the private company mostly are the private and borrowed funds of the owners of the company and there is less involvement of the public interest in the company.  The law grants certain relaxations to the private company to encourage investment and business in the economy. These relaxations provide freedom of operations to the company. Some examples of these relaxations are:

A Private Company can be formed by only 2 members

1. There can be only 2 directors in the private company

2. The private company does not have to appoint independent directors on its board

3. The company has the freedom to give greater remuneration to its directors as compared to a public company.


Private Company Registration Process in India

A private company can be formed with only two persons as members and the directors.

The process of registration of a private company is very simple and completely online. The person desiring to register his company can get his company registered through the Ministry of Corporate Affairs portal. That is www.mca.gov.in. A company is needed to be registered with the registrar of companies or ROC. RoC keeps all the records regarding all the companies in India.


How to register an Online Company in India

There are certain requirements for registering a company. These are:

  • Digital signatures or DSC of all the subscribers and DIN of the person desiring to be the directors of the company. All the forms which are filed on the MCA portal require Digital signatures of the signatories
  • After getting the DSC the form Spice+ is filled on the portal with the required documents as attachments.

 

Required Documents for Registration of Private Limited Company

1. For ID proof- Aadhar Card

2. PAN card, passport

3. For Address proof

4. Latest 2 months Utility bills such as Electricity Bill, Water Bill, bank statements of the subscribers

5. Address proof of company registered office – Latest 2 Months Electricity or water bill and if the pace is rented then Rent Agreement, NOC from the owner

 


Why Companify India Private Limited?

Registering a company is a simple process but it requires professional guidance. We at companify help you to take a step forward in owning your company by providing you with a hassle-free process of company registration. our team of experts will guide you at each step so that you make the right decision as per your need. We have company registration packages tailor-made for your requirements.


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