Private Limited Company
What Is a Private Company?
A private company is a firm held under private ownership. Private companies may issue stock and have shareholders, but their shares do not trade on public exchanges and are not issued through an initial public offering (IPO). As a result, private firms do not need to meet the Securities and Exchange Board of India (SEBI) strict filing requirements for public companies. In general, the shares of these businesses are less liquid, and their valuations are more difficult to determine.This type of business entity limits owner liability to their shareholdings.To register as a Private Limited Company in India minimum two persons to act as shareholders and/or directors are required.
Documents required for Private company registration in India-
- DSC and DIN of proposed directors.
- Identity Proof of proposed directors.
- Address Proof of proposed directors.
- Address proof of proposed company.
- Memorandum of association (MoA) and Articles of association (AoA) of proposed company.
Advantages of a Private Limited Company-
- Seperate Legal Entity.
- Limited Liability protection to Shareholders.
- Can raise capital.
- Easy assess to credit lines/loans.
- Perpetual succession.
- Can attract FDI.
Disadvantages of a Private Limited Company-
- High compliance burden.
- Shares can not be listed on the stock exchange.
- Limit on number of shareholders.