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https://www.legalwindow.in/private-limited-company/
Introduction of Private Limited Company
A Private Limited Company Registration in Jaipur is a company that is privately held for small businesses. The liability of the members of a Private Limited Company is limited to the number of shares respectively held by them. Shares of Private Limited Company cannot be publicly traded. All the aspects of a Private Limited Company are discussed in the article.
Characteristics of Private Limited Company
- Members– To start a company, a minimum number of 2 members are required and a maximum number of 200 members as per the provisions of the Companies Act, 2013.
- Limited Liability– The liability of each member or shareholder is limited. It means that if a company faces a loss under any circumstances, then its shareholders are liable to sell their assets for payment. The personal, individual assets of the shareholders are not at risk.
- Perpetual succession– The company keeps on existing in the eyes of law even in the case of death, insolvency, the bankruptcy of any of its members. This leads to the perpetual succession of the company. The life of the company keeps on existing forever.
- Index of members– A private company has a privilege over the public company as it doesn’t have to keep an index of its members whereas the public company is required to maintain an index of its members.
- Several directors– When it comes to directors a private company needs to have only two directors. With the existence of 2 directors, a private company can come into operation.
- Paid-up capital– It must have a minimum paid-up capital of Rs 1 lakh or a higher amount which may be prescribed from time to time.
- Prospectus– A prospectus is a detailed statement of the company affairs that is issued by a company to its public. However, in the case of a private limited company, there is no such need to issue a prospectus because the public is not invited to subscribe to the shares of the company.
- Minimum subscription– It is the amount received by the company which is 90% of the shares issued within a certain period. If the company is not able to receive 90% of the amount, then it cannot commence further business. In the case of a private limited company, shares can be allotted to the public without receiving the minimum subscription.
- Name– All private companies must use the word private limited after their name.
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