Introduction:- A private Limited company is a company which is possessed b non-governmental associations or a fairly small number of shareholders or members of a company. The pursuant to the section 2(68) of the companies Act, 2013 read with the chapter 1st the companies (Specification of the definitions details) Rules 2014.
There are three types of private limited company:-
- Company Limited by Shares.
- Company Limited by Guarantee.
- Unlimited company.
Characteristics of private limited company:-
Members- To start a new private Limited company, a minimum number of 2 members are required and a maximum number of 200 members as per the prescribed provision of companies Act, 2013.
Paid –Up Share Capital- The Paid -UP share capital of the company as may be prescribed by the article of association of the company.
Number of Directors- The minimum directors of a private company needs to have only two directors and maximum 15 directors of a company with has authorised by special resolution passed in the General Meeting.
Name – It is a mandatory for all private companies to use the word private limited after its name.
Section 2(68) – The pursuant to the section 2(68) of the companies Act, 2013 read with their rules, A private company means a company having a minimum paid –up share capital as may be prescribed and which by its articles -:
- Restricts the right to transfer its share.
- Except in case of One Person Company, the limit of no. its member to 200, provided further that the person will not be included the number of members-
- Person who, are in the employment of the company; and
- Person who, having been formerly in the employment of the company were members of the company while have continued to be a member of the company but does not continued employment.
Prohibits any invitation to the public to subscribe for any securities of the company.