A Private Ltd. Company may be a company which is privately held for little businesses. The responsibility of the members of a Private Ltd. is restricted to the quantity of shares respectively held by them. Shares of Private Ltd. can’t be publically traded.
The administration of such a corporation is Ministry of Corporate Affair (MCA).
Private Ltd Company:-
As Section 2, Clause 68 of Companies Act 2013, “Private Ltd Company” means an organization having a minimum paid-up share capital as could even be prescribed, and which by its articles, – (i) restricts the right to transfer its shares (ii) except just just in case of 1 Person Company, limits the quantity of its members to 2 hundred; (iii) prohibits any invitation to the overall public to subscribe for any securities.
Characteristics of Private Ltd Company
- Members– to start a corporation , a base number of two individuals are required and a most extreme number of 200 individuals consistent with the arrangements of the businesses Act, 2013.
- Limited Liability– The liability of each member or shareholder is restricted. It means if an organization faces loss under any circumstances then its shareholders are vulnerable to sell their own assets for payment. The private, individual assets of the shareholders aren’t in peril .
- Going On– The lifetime of the company keeps on existing forever until it finishes up .
- A number of directors– When it involves directors a private company must have only two directors.
- Paid-up capital– Minimum 1 Lakh Paid up Capital requires which may be prescribed from time to time.
- Name– Private Ltd. should add Pvt Ltd in it name.
Advantages of Private Ltd Company
- Limited liability: there’s a restricted responsibility, which means the individuals from the organization aren’t at the danger of losing private resources. Member liable proportionate as their share in company.
- Fewer shareholders: Minimum 2 share Holders required for the private Ltd. .
- Ownership: This Company owned by Founder, Investor, Member in order that they are the owner they will sell their share to member of company only. This increase Transparency.
- Existence: Company Exist Forever until Lawfully Closed down.