Private Limited Company
What Is Private Limited Company
A Private Limited Company (Pvt Ltd) is a type of business entity that is privately held by a small group of people. It is registered under the Companies Act, 2013 in India and has limited liability, meaning the owners’ personal assets are protected in case of business losses.
Key Features of a Private Limited Company:
Limited Liability: The shareholders’ liability is limited to the amount they invested in the company.
Separate Legal Entity: The company has a distinct identity separate from its owners.
Minimum & Maximum Members: Requires at least 2 directors and 2 shareholders, with a maximum of 200 shareholders.
No Public Trading: Shares cannot be freely traded on the stock market.
Perpetual Existence: The company continues to exist even if shareholders change or pass away.
Compliance Requirements: Needs to follow regulatory compliances like annual filings, board meetings, and tax filings.
Benefits Of Private Limited Company
- 1 Limited Liability Protection
✅ Shareholders’ liability is limited to their shareholding.
✅ Personal assets of directors/shareholders are safe from company debts.
- 2 Separate Legal Identity
✅ A Pvt Ltd company is a separate legal entity distinct from its owners.
✅ It can own property, enter contracts, and sue or be sued in its own name.
- 3 Perpetual Existence (Business Continuity)
✅ The company continues to exist even if shareholders or directors change.
✅ Ensures long-term stability and smooth succession planning
- 4 Higher Credibility & Brand Trust
✅ More credibility than sole proprietorships and partnerships.
✅ Helps in gaining trust from banks, investors, and customers.
- 5 No Minimum Capital Requirement
✅ Attracts funding from angel investors, venture capitalists, and banks.
✅ Banks prefer lending to Pvt Ltd companies due to structured operations.
- 6 Tax Benefits & Lower Corporate Tax
✅ Eligible for government tax exemptions and startup benefits.
✅ Lower corporate tax rates compared to LLPs and partnerships.
Documents Required for Private Limited Company Registration in India
1. Documents of Directors & Shareholders
PAN Card – Mandatory for all Indian directors & shareholders.
Aadhaar Card – Required for identity verification.
Passport (For Foreign Nationals/NRI Directors) – Must be notarized/apostilled.
Address Proof (Any one of the following) – Recent utility bill (Electricity Bill, Bank Statement, Telephone Bill, or Mobile Bill – not older than 2 months).
Passport-size Photographs – Clear and latest photo of each director/shareholder.
2. Registered Office Address Proof
Electricity Bill / Property Tax Receipt / Gas Bill – Must be recent (not older than 2 months).
Rental Agreement (If Rented Property) – Agreement between owner & company.
NOC from Property Owner – No Objection Certificate (NOC) from the landlord to use the premises for company registration.
3. Additional Documents (If Applicable)
Digital Signature Certificate (DSC) – Mandatory for all directors for online document submission.
Director Identification Number (DIN) – Issued by MCA for company directors.
Memorandum of Association (MoA) – Defines the company’s objectives and scope.
Articles of Association (AoA) – Defines company rules & internal management policies.