What is a Private Limited company – Complete details, Registration, Fees
A private limited company is a type of business entity that is privately owned by a group of individuals or a single person. In this type of company, the shareholders’ liability is limited to the amount of money they have invested in the company. It is one of the most popular forms of business structures globally and is prevalent in many countries.
In a private limited company, the shareholders get an advantage that they are the owners of the company. They own the shares of the company and are entitled to receive dividends, which are a share of the company’s profits. The shareholders’ liability in the company is limited to the amount of money they have invested. This means that if the company incurs any debt or liability, the shareholders’ personal assets are not at risk or will not be used to pay off the debts of the company.
Private Limited Company Structure
The private limited company structure provides several benefits to the owners, including limited liability, which means that their personal assets are protected if the company encounters any financial difficulties.
Additionally, it provides a clear structure for ownership and management, making it easier to raise capital and attract investors. Given below is the list of all the designations and company structure of a private limited company.
4.Chief Executive Officer (CEO)
5.Chief Financial Officer (CFO)
7.Chief Operating Officer (COO)
8.Chief Technology Officer (CTO)
A private limited company may have some more designations and titles as per the requirements of the company.
How to Register a Private Limited Company
To set up a private limited company, one must first register the company with the relevant regulatory authority in the country of operation, as Indian companies must be registered with MCA( Ministry of Corporate Affairs). This typically involves registering the company name, selecting a business activity, identifying the directors and shareholders, and obtaining necessary licenses and permits.
Though obtaining permits can be a complicated process for an individual, you need to take help of a professional in setting up and registering your private limited company online as it requires multiple documents such as proof of identity of directors and shareholders, registered office address, MOA and AOA to be submitted on the MCA Portal.
You can take help from our professional team at professional utilities and get your private limited company incorporated within 7-14 days at a very minimum cost starting from just Rs 4,999 – Talk to our Team
Shareholding in a Private Limited Company
One of the key features of a private limited company is that the shares are not publicly traded. The company cannot sell shares to the public, and the shareholders cannot sell their shares to the public without the permission of the other shareholders. The shareholders are the owners of the company such as the founders and directors of the company. The shares cannot be publicly traded and cannot be offered to the public via Initial Public Offering( IPO) or by listing at any Stock exchange.
Examples of private limited companies in India
A private limited company name ends with Pvt Ltd as suffix of the company name. Some examples of private limited companies are- Flipkart Pvt Ltd, Malabar Gold Pvt Ltd, Mother Dairy Fruit & Vegetable Pvt Ltd, Parle Products Pvt Ltd.
Whereas the examples of public limited companies are – Reliance Industries Ltd, Bharat petroleum, State Bank of India, ONGC etc.
Private Limited company is suitable for which type of Businesses?
Private limited companies are ideal for small to medium-sized businesses that want to limit their liability while maintaining control over their business. They are also suitable for businesses that require significant investment to grow or expand their operations.
The company structure provides flexibility in terms of ownership and management, making it an attractive option for entrepreneurs. A private limited company can take funding from private investors or Foreign Direct investment(FDI), but it cannot offer shares to the general public.
In conclusion, a private limited company is a popular business structure that provides limited liability to its owners. It is ideal for small to medium-sized businesses and provides a stable ownership structure that is less prone to hostile takeovers. If you are considering setting up a business, a private limited company may be an excellent option to consider.
You can take help from our Professional team at Professional Utilities to set up and register private limited companies online.
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FAQS on Private Limited Company
Q1: What is a Private Limited Company?
A Private Limited Company (Pvt. Ltd.) is a type of company that is privately held by a small group of individuals or shareholders. It is a separate legal entity from its owners and has limited liability, meaning that the liability of its shareholders is limited to their investment in the company.
Q2: What are the requirements for registering a Private Limited Company?
The requirements for registering a Private Limited Company in India has some basic requirements. Generally, you will need to have a minimum of two directors and two shareholders, a registered office address, and a memorandum of association and articles of association.
Q3: How long does it take to register a Private Limited Company?
The time it takes to register a Private Limited Company in India depends on the documents approval by the Ministry of Corporate Affairs, which might take around 7-10 working days.
Q4: Can a Private Limited Company issue shares to the public?
A: No, a Private Limited Company cannot issue shares to the public. It can only issue shares to its shareholders and cannot invite the public to subscribe to its shares.