The growth of trade and business led to many problems that traditional forms of business did not solve. For example, the unlimited liability feature of a sole proprietorship form of business resulted in people forming partnerships, but even that proved to be too inadequate and risky. This is when the concept of companies emerged, and private companies form of business is the oldest example of it.
Section 2(68) of Companies Act, 2013 defines private companies. According to that, private companies are those companies whose articles of association restrict the transferability of shares and prevent the public at large from subscribing to them. This is the basic criterion that differentiates private companies from public companies.
The Section further says private companies can have a maximum of 200 members (except for One Person Companies). This number does not include present and former employees who are also members. Moreover, more than two persons who own shares jointly are treated as a single member.
This definition had previously prescribed a minimum paid-up share capital of Rs. 1 lakh for private companies, but an amendment in 2005 removed this requirement. Private companies can now have a minimum paid-up capital of any amount.
These are some features that distinguish private companies from other types of companies:
The documents required from the director and shareholders are:
Documents required of the proposed registered address are as follows:
Private limited Company registration process can be completed in around 10-14 working days after all document received completely from customer side; as follows:-
Any individual can become a shareholder in a private limited company. For becoming a director in a company, no professional or educational qualification is required.
The Registered office does not mean to be owned only; it can be rented premises also. The registered office is used for the purpose of holding a general meeting, keeping records and receiving correspondence from all the statutory government timely. It also specifies the jurisdiction of the registered office.
Yes, we can easily change the registered office of the company any time after the specified procedure is completed. The changed address can be situated within the same state or in a different state, depending upon the conditions.
It provides creditability to business in the eyes of financial institutions, suppliers and potential clients. As it makes easier for companies to get loans at favourable terms from banks or convincing potential clients while entering into deals.
Yes, any foreign nationals, entity or an NRI can become a director or shareholder of a private limited company in India.
Ministry of Corporate Affairs has introduced a new form called the SPICe INC- 32 form for the faster company incorporation. Apart from this, to register a private limited company, an e- MoA (INC-33) and e- AoA (INC- 34) are also to be submitted with the above form.
Yes, the private limited company can be converted into private company registration after following the companies act, 2013 procedures.
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