Private Limited Company Registration
What is a Private Limited Company?
The beginning step in your entrepreneurial journey is choosing the right structure for your business. A Private Limited Company is a small business entity which is privately held by stakeholders. The liability of the owners is reduced to the amount of shares they hold in that company. The governing authority for a Private Limited Company is the Ministry of Corporate Affairs (MCA), under the Companies Act, 2013.
This form of a business structure is widely adopted by start-ups or small business entities as it can be registered with a minimum of 2 directors and 2 shareholders. The name of such companies should be suffixed with 'Pvt. Ltd.'
Benefits & Liabilities of a Private Limited Company
Benefits of a private limited company
- Limited Liability of shareholders, entails that in case of the company failing, the members won't risk losing their private assets.
- Distinct legal entity, a Private Limited Company can sale, purchase and own property under its name like an individual.
- Ownership, is transferable by the transferring of shares.
- Continuous existence, the company persists to exist even after the death of any member, until it is legally dissolved.
- Easier Borrowing or Funding of Capital, a Private Limited Company can easily fund or borrow capital from angel investors/venture capitalists/banks/financial Institutes.
Liabilities of a private limited company
There are several compliances that a Private Limited Company must follow annually, such as holding board meetings, filing annual tax returns with the Income Tax Department and getting the account audited by CA, among others.