Private Limited Company

It is one of the most sophisticated forms of business entities in India. It is a separate legal entity both in terms of taxation as well as liability. It consists of a group of shareholders and the total capital of the entity is made up of shares. These shares can be sold/transferred to another individual who then also becomes one of the owners of the company.Every shareholder is just responsible for his share of the total capital.

A private limited company can be formed by registering the company name with appropriate Registrar of Companies (ROC). Draft of Memorandum of Association and Article of Association are prepared and signed by the promoters (initial shareholders) of the company. A Private Limited Company can have between 2 to 50 members with minimum share capital of Rs 1,00,000 (one lac). To look after the day to day activities of the company, Directors are appointed by the Shareholders. Minimum two Directors must be appointed to look after the daily affairs of the company. It needs to maintain records of financial transactions, board meetings, and annual reports and so on.