Private Limited Company

Private Limited company is a company which is formed with minimum of 2 members and limited to 200 members. Here, transfer of shares is restricted and invitation to public for subscription to shares is prohibited. A private company can only accept deposits from its members up to a particular limit.

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Advantages and Requirements

Advantages of getting registered as Private Limited company

  • Limited liability protection to the members of the company.
  • Stability and perpetual succession as the company continues to exist irrespective of exit of members.
  • Better credibility is created for obtaining funds from investors.
  • Easy to raise loans from financial institutions.
  • Easy to get credit from suppliers.
  • Management and ownership separation is created which helps in better decision making for success of the business.

Requirements to register and documents required

  • Minimum 2 members
  • Minimum 2 Directors and their details like names, address, PAN, identity proofs etc.
  • One of the Directors must be an Indian Resident
  • In case of rental property- Rental agreement, NOC from the owner of the property, proof of address, and copy of utility bills
  • In case of own property- proof of ownership

Types of Private Companies

For a company limited by shares, the liability of the members is limited by the Memorandum of Association to the nominal amount of his/her share or so much which remains unpaid. Therefore, the liability of the shareholder with respect to a Private Limited Company limited by shares is restricted to the paid-up share capital or any amount that remains unpaid. The shareholder cannot be held liable or asked to pay more than his/her share capital invested in the company.

Steps to Register

Company incorporation can be done through online filing of SPICe+ form.

The SPICe form was an e-form for incorporation of company, whereas the SPICe Plus form is an integrated web form that can be utilised for multiple services.

The form is divided into two parts:

This part of the form is for applying for Name Reservation for a company