Advantages of Private Limited Company Registration

A Private Limited Company (Pvt ltd company) is the most common means of doing business for an entity intending to make a profit and enjoy the benefits of an incorporated entity. Registering a Private Limited Company is the right choice. Let’s take a look at the advantages and procedures of private limited company registration.
Private Limited Company Registration

What are the advantages/features of private limited company registration?

A private Company means an organization which is having a minimum paid-up share capital of rupees one lakh or such higher paid-up share capital as might be authorized and as mentioned in the Companies Act,2013.

a) Limit the right to transfer its shares.

b) Excluding a One-person organization that limits the number of its members to two hundred; offering that where two or more humans hold one or more shares in an organization jointly, they should be handled as a single member for this clause.

Provided further that

1. Persons who are employed by the organization and

2. Persons employed with the organization and who are the members of the organization while in that employment and have continued to be members after the employment ceased shall be involved in the members.

3. It also limits any invitation to the public to subscribe to any securities of the organization.

Advantages of Private Limited Company

Let’s go through the lawgical india advantages of forming a Private Limited Company.

1)   Ownership:

In the case of a public organization, the shares owned can be sold to the public in the open industry. However, in the case of a Pvt Ltd company registration online, shares can be transferred or sold by the owner as per his wish. Shares of the private one are owned by private investors, founders, and management. The shares of a private one cannot be sold in the open industry. Thus, private company registration is owned by a small number of shareholders which enables less confusion and complexity in management and decision-making.

2)   A minimum number of shareholders:

In the case of a Pvt ltd company registration online, a minimum of 2 shareholders is needed. However, in the case of Public one, a minimum of 7 shareholders is needed.

3)   Legal Compliances:

Legal Compliances are a significant factor after forming an organization. If you plan to form a Public Limited company then you must be ready to follow a long list of compliance after setting up a public limited company. However, the legal compliance in the case of a private limited company is lesser in the case of a private one. Decision Making and Management:

As the shareholder number is less in the case of a Pvt ltd company registration online as such decision-making becomes smooth and easy. However, management and decision-making are tough in the case of a public limited organization as a greater number of shares are to be asked in the case of decision making.

4)   Minimum Share Capital:

The investment needed in the case of a Public Limited organization is more. A Public organization needs a minimum share capital of Rs.5,00,000. However, in the case of a pvt ltd company registration online, the minimum share capital needed is Rs.1,00,000. Also, note there is no such minimum requirement constraint.

5)   Continued Existence:

Another benefit of a Private one is its continued existence even after the owner leaves the business or dies. As a pvt ltd company registration online is included it becomes an independent legal entity.

What are the features of the Private Limited Company?

Given are the lawgical india features of a private limited company:

1) Members: To form a private limited organization with a maximum of 200 members and a minimum of 2 members as per the provisions of the Companies Act,2013.

2) Limited Liability: The members' liability is restricted to the number of shares held by them. For example, if the organization faces any losses under any situation the shareholders are answerable only to the shares held by them. The personal assets possessed by the shareholders are not at risk.

3) Perpetual Succession: The organization exists in the eyes of the law even in case of bankruptcy, death, or insolvency of any of its members. This denotes the life of the organization that keeps on existing forever.

4) Register of Members: There is no compulsion for the private limited company registration to support the register of members as needed by a public limited organization.

5) Directors Requirement: Required of Directors in the case of a private limited company registration is only 2. With a minimum of 2 directors, an organization can carry on its operations.

6) Paid-up Capital: A private limited company registration should have a minimum capital of rupees one lakh or such a higher amount advised from time to time. However, as per the latest amendment, there is no such minimum capital requirement.

7) Prospectus: It is the detailed statement of the affairs of the organization which is issued to the public. However, in the case of a private company registration, there is no such requirement to issue a prospectus.

8) Minimum Subscription: It is the amount received by the organization which is 90% of the shares issued within a certain time period. In case the organization is not able to receive 90% of the amount it shall be able to begin its business. However, there is no such restriction in the case of a private company registration, they can begin the business as soon as the organization is formed.

9) Name: The private company registration should use the word “PRIVATE LIMITED COMPANY” at the end.

What is the procedure to be followed by setting up a Private Limited Company?

The given steps are to be followed in case of establishing a lawgical india private limited company registration:

1)   Private limited Incorporation:

After submission of the form required, the Incorporation Certificate will be received along with TAN and PAN will be received within 3 business days.

What documents are needed to set up a Private Limited Company?

To start with the procedure of registering a private limited company registration the given documents are needed:

Directors and Shareholders documents:

a)  Passport size photograph

b)  Pan Card

c)   Identity Proof (Any 1)

(i) Passport

(ii) Aadhar Card

(iii) Driving License

(iv) Voter ID

d)   Proof of Address (Any 1):

(i) Bank Statement with the fresh transactions

(i) Electricity Bill

e)   Registered Office Proof (Any 1):

(i)Electricity Bill

(ii) Rent Agreement

(iii)NOC from the owner

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