PRIVATE LIMITED IN DELHI/NCR
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Private Limited Company
When we come to know that a particular company is Private Limited, we should understand that the company is owned by a limited number of investors and the number of investors is relatively small. When the shares of a Public Limited company are open to the public, the shares of a private limited company are held by its promoters only. In other words the company is in the hands of a few people only. A pvt ltd company is privately held for running a business. The members of the private limited company will have limited liability and will be equal to the amount of shares held by each member. Since the shares are not open to the public, they are not available for public trading. The liability of each member is limited and in case the company accumulates loss for any reason, the shareholders have to sell their assets for payment. The individual asset of a shareholder will not be under risk. If a company is private limited, as per law the company will exist even after closure, insolvency or bankruptcy of any of the member. Since the company exists for ever, perpetual succession is possible.
Private limited company registration
A private limited company can be registered with a minimum number of 2 members and maximum number of 200 members. The pvt ltd company registration is less complicated when compared to public limited company registration and moreover the registration process is less expensive as well as less time-consuming. A minimum of 2 shareholders and 2 Directors must be there for pvt ltd registration. The process of registration is rather simple. A private limited company can have up to 15 Directors. Minimum 2 persons are also required as share holders of the company. A shareholder can be either a natural person or an artificial legal entity.
For pvt ltd company registration, the proposed Directors of the company are required to submit PAN in case of Indian Nationals and Passport in case of Foreign Nationals. As proof of address Indian Nationals can submit Passport or Drivers License or Election ID or Ration Card or Aadhar ID whereas Foreign Nationals can submit Passport or Drivers License or Bank Statement or Residence Card. Directors who are Indian Nationals can submit Bank Statement or Electricity Bill or Telephone Bill as documents for proof of residence and Foreign Nationals can submit Bank Statement or Electricity Bill or Telephone Bill as proof of residence. The document which is submitted as proof of residence must be less than two months old. If one of the shareholders of the company to be registered is another company in this country or abroad, they are required to submit the Board Resolution authorizing the investment in the company, Incorporation Certificate of the company and Address Proof of the company.
The pvt ltd registration process
Naming the company is one of the major step for registering a private limited company. Name of the company must have three parts - the name, activity and at the end private limited. For private limited company registration, 5 - 6 names are to be proposed out of which one name will be approved by the registrar of the company. While submitting the names, the Directors should ensure that the names are unique as well as expressive. The names should not resemble with the name of any other company. The name given at the time of the private limited company will remain the same throughout the life of the company. For pvt ltd company registration the Directors should provide the complete address of the registered office of the company. The permanent address of the registered office should be suited with the registrar of the company. The important affairs of the company are conducted at the registered office only and all the documents pertaining to the company are kept in the registered office of the company.
It is very important to obtain digital signature certificate while registering the pvt ltd company. Nowadays, almost all registration processes are carried out online. For online registration, all the documents are to be submitted electronically. In order to verify the authenticity of the documents, the company should get the digital signature certificate. All the Directors should obtain the digital signature certificate and the same is marked on all the documents by each Director. Professional Certification is another part of pvt ltd company registration. The company will require many professionals for various purposes and a private limited company certification by these professional is essential for incorporating the company. Different professionals like company secretary, chartered accountant and cost accountant are required to give their certification at the time of the private limited company registration.
Advantages of Private Limited Company
1. Legal Entity
When the company is Private Limited, it is a legal entity which is separate from the legal entity of its members. The legal entity provides real and distinct existence to the company. The registered pvt ltd company has wide legal capacity and it can own property as well as incur debts. For the debts that are incurred by the company, the Shareholders and Directors of the company will have no liability to the creditors.
2. Firm existence
A Private Limited Company has perpetual succession. Unless and until the company is dissolved legally, it will have uninterrupted existence. The company remains unaffected by the death or departure of any member or members. The most important advantage of a private limited company is perpetual succession.
3. Members have only limited liability
As far as liability is concerned, the company that is Private Limited is entirely different from proprietorships and partnerships. The pvt ltd company is a limited liability company and the members will have only limited liability in respect of the company's debts. Their liability is limited to the face value of the shares that they have in the company. The liability of the members on a winding-up is limited to the unpaid amount on their shares.
4. Transferability of Shares
The shareholder can transfer his shares to any other person. When compared to proprietary companies and Partnerships, the transfer of shares of a private limited company is easier. The process of share transfer consists of just filling and signing the share transfer form and handing over the shares and share certificate to the buyer.
5. Property Ownership
The pvt ltd company can acquire, own, enjoy and alienate property in its name. So long as the company is going, the shareholders cannot make any claim upon the company's property. Only the company is the owner of the property and shareholders are not the owners.
6. Can institute legal proceedings
The private limited company can sue and also be sued in its own name. Being an independent legal entity, the company can institute legal proceedings against someone or can bring a suit in a court of law.
7. Dual Relationship
In a Private Limited Company, a person can simultaneously be a shareholder, Director, creditor and an employee of the company.
8. Can have better opportunities for borrowing
The pvt ltd company can issue secured as well as unsecured debentures and can accept deposits from the public. It is easier for a private limited company to obtain large financial assistance from banks and financial institutions when compared to partnership firms and proprietary concerns.
It is to be understood that private limited company is a popular type of business with various advantages. Private Limited Company has more scope of profit and stability. However, it will have some disadvantages also. But, it is a known fact that the disadvantages of private limited company are overruled by its advantages.