1. What is Private Limited company?
A private limited company is form of organization in which more than one person whether natural or artificial
come together to earn profits, this type of business limits owners (shareholders) liability to the extent of their
shareholding in the company. The number of shareholders are limited to 200 and restrict the right to transfer the shares publicly.
2. Who can become member in private limited company?
Any natural person or entity having separate legal identity can become member in the private limited company,
but there shall be atleast 2 members to form a private limited company.
3. What are the minimum and maximum number of directors in a private limited company?
A private limited company should have atleast 2 directors and maximum 15 directors.
4. Whether registration of private limited company is mandatory?
Yes for formation of private limited company registration with registrar to companies is mandatory. To know the process
5. What are the agreement or deed governing the bye laws of the company?
In case of companies the area of operation i.e. business activities, its relation with outsiders, restriction on transfer
of shares, directorship and internal mode of operation of company are governed and is written in documents which is called
Memorandum of association and Article of association. The Memorandum and Article of association are the basic documents of
the company which are mandatory and just like constitution of the company. To know more about Memorandum and association and article of association
6. What is minimum amount of paid up capital required to start private limited company?
There is no upper limit, however minimum paid up capital of Rs100000/- (One Lac rupees) is required to be introduced in order to
incorporation/form private limited company. In the private limited company paid capital of the company is restricted to the extent
of authorized capital of the company and in order to enhance the paid up capital, one has to increase the authorized capital of the company.
7. How can i invest money/paid up capital in private limited company?
In private limited company whether it is subscribers initial capital or further issue of shares (except right issue or sweat equity shares)
investment is required to be made through proper banking channel separate bank account of the company. Refer section 42 of the companies act, 2013.
8. Can i open a bank account of Private Limited company?
Yes, with the certificate of incorporation and Memorandum of association bank account after complying with other RBI Norms can be opened,
there is no need to apply any other registration with government department like VAT or Service Tax etc.. To know more about how to open bank account
9. Whether registration with government departments are mandatory ?
No, only applicable government registrations are mandatory like if sales exceed specified limit of turnover then registration with Value Added Tax (VAT),
Service Tax Registration, Excise or shop and establishment as applicable are mandatory. To know about registration with government departments click here.
10. What are the maximum number of shareholders in private limited company?
In private limited company maximum number of shareholders cannot exceed 200 (two hundred).
Further there is restriction on right to transfer share of the company publicly.
13. Can a private limited company invite investor’s money?
Yes, a private limited company are favourites of angle investors or venture capitalists, they give preferences to this type of
business structure and can invest money through equity investment. All banks and financial institutions give more preference to advance
loans and funding to companies rather than proprietorship and partnership firms.
14. Whether name of the company is protected against duplication? Or whether name of an existing company be used for form new company?
No unlike partnership firm, in case of limited liability partnership and companies name of an existing company cannot be taken by any other person.
If anyone tries to take same name it will not be approved by the registrar of companies. So it provide protection of theft of name irrespective of
whether trademark of name is taken or not. Further taking name of the company requires approval from the registrar of companies and should company
with the guidelines issued from time to time. To know more about such guidelines click here.
15. Which forms are required to be filed with registrar of companies by private limited companies?
To know the forms which are required to filed with registrar of companies, click here.
16. What are the due dates of filing of forms of private limited company and penalties for late filing of forms of private limited company?
To know the due date of filing forms with registrar of companies, click here.