Private Limited Company


private limited company is a company which is made to look after  small businesses. A Private Limited Company is defined under Sec. 2 (68) of Companies Ac, 2013.


To start a Pvt. Ltd. Company, atleast 2 members are required and a maximum number of 200 members can be there.

Limited Liability

The liability of every shareholder is limited in the company. In other words, a shareholder of a public limited company is not personally responsible for any kind of  loss or debts occur to the company. Partners have joint and several liability in these companies.

However, this character of a public company does not offer any immunity to the respected shareholders. The shareholders will be held liable for their own illegal acts.

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  • Paid up capital

    Private limited companies are required to have  minimum paid-up capital of Rs one  lakh or can be  higher amount as per the provisions under Act.

  • Prospectus

    A prospectus is statement of the affairs of the company issued to the general public. But issuance of prospectus is not mandatory for private companies.

  • Name

    It is a compulsory under the Companies Act, 2013 for all the private companies to use the suffix ‘private limited’ after their name. Name of the company must fulfill all the necessary requirements under the Act.

  • Directors

    As per the provisions of the Companies Act, 2013 to start a private limited company, two directors  are required.

  • Perpetual succession

    A company keeps going, even after its members declared insolvent or bankrupt. A private limited company never dies.

  • Capacity to Sue and to be Sued

    Public limited company can take legal action against a person and also other person can take legal action against company.

  • Advantages


    Shares can be transferred by owner himself, there is no such long procedure in private companies.

    Legal formalities

    When we talk about forming a private limited company, there has been some mandatory legal requirements which needs to be fulfilled. In these companies list is shorter unlike public companies.

    Minimum share capital

    For a private limited company, earlier there was a minimum number of the share capital was Rs. 1,00,000, but in present scenario there is no such minimum compulsion. However,  there is no pressure of fund requirements.

    Stock market pressure

    In private companies there is not stock market pressure, they can work according to their strategies whether it is long term or short term.

  • Procedure to register Private Limited Company

    After getting a name  for the company, there are some steps by which a private limited company can be registered easily.  

    Step 1: Application is made  for DSC (Digital Signature Certificate) and DIN (Director Identification Number)

    Step 2: An application is required to be made for the selection of the name of the company

    Step 3: The MOA and AOA must be filed to register the private limited company

    Step 4: PAN and TAN of the company is also a mandatory condition to register the company

    Step 5: After PAN and TAN, certificate of incorporation is  issued to company by RoC with PAN and TAN

    Step 6: After getting all these, an account must be opened on the name of the company.

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