A private company is a company which is privately operated for small business. The main liability of the members of the private company is limited in amount of shares. They can be controlled by the Shares of private limited companies that cannot trade publicly. The main characteristics of private company are
Main members- For starting up of a company, only 2 members are required in minimum category and maximum of 200 which come under companies act.
Liability is limited– the liability of the company is limited in this type as when there is loss in business. Then shareholders can easily sell the liability of the business in order to recover losses that are done in business.
Index is not maintained- In this type of company no index is required because members are less. But in case of public company it is important to maintain the index
Paid up capital– the minimum paid up capital is online 1 lakh which is enough to start up the business.
Name– it is important for the company that they should write private limited company at the end of the company’s name.
Things required for starting up the company
It is important for the business owners that they should decide the company name and put the word private at the end of the company name. Business owners will have to move for many steps that will help them in the registration part.
- Business owners will have to apply for the DSC signatures along with their DIN number.
- Business owners will also have to apply for the name availability
- They have to file the MOA along with AOA in order to get registered with a private limited company.
- They also have to apply for pan of the company
- They will get a certificate of registration which will be issued by ROC.
- They will also have to open a company bank account for smooth conduction.
What are the things required for private companies?
Directors- In this type of company, business owners will be requiring the two directors that will be better for registration. Each member should have a director identification number which will be helpful to them in different fields.
Name- As it has been earlier said, that the word private limited should be mentioned at the end of the word. It is important for the owners that they should decide the company name by considering the name along with activity and private ltd. Apart from that business owner are sending the names to the registrar for approval so after that they will finalize the company name. The title should be unique and expressive in nature.
Some of the important things which are required will include
Ownership– The owner ship is in the hands of the business owners in case of small companies as they have less numbers of people. Some of the company members are not able to purchase the share. They can easily take the help from a Nominee Shareholder who will prove useful to them. People can easily purchase and sell shares.
Thus these are the main things required for private companies.