A Private Limited Company is a privately held business entity in which ownership is restricted to a small group of shareholders. It limits liability to the extent of shares held, restricts share transfers, and prohibits public fundraising.
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Under section 2 (68) of company act 2013, Private company mean register a private limited company under company’s act 2013 having paid-up share capital as may be prescribed, and which by its articles, —
Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purpose of this clause, be treated as a single member:
Provided further that-
It is a form of business which is came into existence through companies act. It is form of business having separate legal entity form its promoter just like other form of company. The main advantage of Private limited form of company is that the financial liability of shareholder is limited to their shares.
Out total company registration in India 93% of company comes in private limited company registration, because of its easy to form and easy to dissolve and has less compliance as per the provision of law as compare to public limited or listed company.
An entity means something that has a true existence; an object with a distinct existence. A company is a legal entity and a legal entity established under the Law. Hence a company is form of organization having broad legal potential and that may own property and also incur debts in its own name. The members of company has no liability towards company debts because company and members both are separate person in the eye of law, hence company is a artificial person having separate legal identity.
Limited Liability means the status of being legally responsible for a company's debts only to a limited sum. Like proprietorships and partnerships, the Member's responsibility for the company's debts is limited in a limited liability company. In other words, the responsibility of a company's members is limited only to the sum of the face value of the shares they take over.
A company may buy, possess, enjoy and alienate property under its own name, becoming a legal individual. No shareholder can claim the company's property as long as the company is a company. The shareholders are not the actual owners of the company. The company itself is the real proprietor.
To sue means initiating legal action against or putting a suit before a court of law. Just like one person in the name of another person can bring legal action against another in his / her own name, a company being an independent legal entity can sue and be sued in his / her own name too.
The private limited company, being a separate legal entity in the eyes of law, is known by its name. Thus, director / member cessation / death does not affect the Private Limited Company's existence. Members may come and members will leave but the company goes forever.
A private limited company can raise funds from its member after issuing shares to them or issuing debt securities to them. And private limited company has opportunity to convert itself into public limited after which it can raise money from general public at large after listing its shares in the stock exchange and taking IPO in the market.
If a business is established as a proprietorship or partnership, it is not registered with the Ministry of Corporate Affairs and cannot be found in the databases of the online company or LLP. Often there is no reliable evidence of the existence of the company, making it difficult to open a bank account, acquire trustworthy clients or receive credit from vendors.
Private limited company is easy way to get into the corporate market, only you need to get register your form of company under ministry of corporate affairs and obtain the certificate of incorporation and it has easy exist option too if you want to shut down your business you only need to inform to ministry through required form and you take exist legally after settling your liability.
As per the point of view of incorporation there is no minimum capital required for incorporating a private limited company. As per company law 2013 you can start a private limited company with 0 paid up capital.
A private limited company cannot invite public at large for making investment in the company, apart from its member no personal is allowed to make investment on the company. It is prohibited from company law 2013.
In a private limited company person a shareholder cannot transfer its share to general public (non-member) unless it is approved by board of the company. Under private limited company the share firstly transfer to its member if they refuse to accept then only it can be transfer to third person, this restriction is imposed by law.
Private limited Company form of business is easy and simple way to get into the corporate world and it is easy way for a good start-up. As compare to Sole Proprietorship, it is a better option for start-up as in this form of business liability of member is limited. It is a good platform for incorporating a company form of business having ownership.
If a business is established as a proprietorship or partnership, it is not registered with the Ministry of Corporate Affairs and cannot be found in the databases of the online company or LLP. Often there is no reliable evidence of the existence of the company, making it difficult to open a bank account, acquire trustworthy clients or receive credit from vendors.
As per the point of view of incorporation there is no minimum capital required for incorporating a private limited company. As per company law 2013 you can start a private limited company with 0 paid up capital. Whereas if you want to incorporate public limited company you need to have 5 Lakh as minimum paid up capital
Limited Liability means the status of being legally responsible for a company's debts only to a limited sum. Like proprietorships and partnerships, the Member's responsibility for the company's debts is limited in a limited liability company. In other words, the responsibility of a company's members is limited only to the sum of the face value of the shares they take over.
Next step is to fill the part-B of SPICe + which will contain all the detail related to incorporating company like number total number of directors and members, Authorized share capital, paid up capital, number of share hold by members, company registered address detail, directors and member detail and will required attachments for proof. Then draft the MOA (memorandum of association) and AOA (Article of Association) of proposed company, then fill form required for EPFO and ESIC registration with detail, then Fill the AGILE form for procuring GSTIN. After filling all these attach the signature and then upload it on MCA website.
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Compliance Calendar for Companies Act, 2013 |
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Companies Need (i.e. Companies who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed 45 days from the date of acceptance or the date of deemed acceptance of the goods or services as per section 9 of the Micro, Small and Medium Enterprises Development Act, 2006) to file details of all outstanding dues to Micro or small enterprises suppliers existing on 22nd January, 2019. |
MSME Form I |
30 days from the date of deployment of e-form in the MCA portal |
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2. |
Initial Return for disclosure of details of outstanding money or loan received by company but not considered as deposits in terms of rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014. |
Form DPT-3 |
22-04-2019 |
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Note: Every company (other than Government company) shall file a onetime return of outstanding receipt of money or loan from 01st April, 2014 till 22nd January, 2019, which are not considered as deposits, in Form DPT-3 within ninety days of 22nd January, 2019. |
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3. |
Every company incorporated on or before the 31st December, 2017 shall file the particulars of the company and its registered office, in e-Form ACTIVE (Active Company Tagging Identities and Verification). |
Active Form INC -22 A |
25-04-2019 |
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4. |
Application for KYC of Directors for the year ending 31.03.2019. |
e-form DIR 3 KYC |
30-04-2019 |
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5. |
Every individual, who is an SBO in a Reporting Co. shall file Form BEN 1 within ninety days from the commencement of the SBO Rules (i.e . 8th February 2019) |
Form BEN 1 |
08-05-2019 |
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6. |
The Reporting Co. shall issue Notice to members (other than individuals) holding not less than 10% of its shares or voting rights or right to receive dividend, seeking information about SBO. |
Form BEN 4 |
Not specified |
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but maximum time limit of 90 days for individual to furnish Form BEN 1 |
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Filing of e-form BEN-2 by the Reporting Co. under the Companies (Significant Beneficial Owners) Rules, 2018 (as amended by the Companies (SBO) Amendment Rules, 2019. |
Form BEN-2 |
30 days from the date of receipt of form BEN-1. |
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8. |
Annual filing |
MGT-7 |
In within 60 days from holding of AGM |
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9. |
Financial Statement |
AOC-4 |
In within 30days from holding of AGM
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10 |
Appoint Auditor |
ADP-1
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Within 15days of meeting in which auditor is appointed |
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A Liaison Office (LO) serves as a representative office formed specifically for exploring and understanding the business and investment climate. A Liaison Office (also known as the Representative Office) can only undertake specified liaison activities.
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