Private Limited Company is the most common and prominent kind of corporate legal entity in India. Private limited company enrolment is administered by the Ministry of Corporate Affairs, Companies Act, 2013 and the Companies Incorporation Rules, 2014. To enrol a private constrained organization, at least two investors/shareholders and two directors are required. An individual can be both an director and investor, while a corporate legal entity must be an investor. Further, foreign nationals, foreign corporate entity or NRIs are permitted to be Directors as well as Shareholders of a Company with Foreign Direct Investment, settling on it the favoured decision of element for foreign advertisers.
Unique features of a private limited company like limited liability protection to shareholders, ability to raise equity funds, separate legal entity status and perpetual existence make it the most recommended type of business entity for millions of small and medium sized businesses that are family owned or professionally managed.
One of a kind highlights of a private constrained organization like restricted obligation assurance to investors, capacity to raise value reserves, separate lawful substance status and never-ending presence make it the most prescribed sort of business element for many little and medium measured organizations that are family claimed or professionally overseen.
White Code Legal is the market pioneer for administrations identifying with organization enlistment in India. White Code Legal can enable people to enrol a private limited company etc. The normal time taken to finish organization development is around 10 - 15 working days, subject to government preparing time and customer archive accommodation.
1) Separate Legal Entity- Private Limited Company is a legal entity and a juristic person established under the Companies Act. Hence, a company has a range of legal capacities including opening of a bank account, hiring of employees, taking on equity or obtaining licenses and more as an independent corporate entity. The members (Shareholders/Directors) of a company have no personal liability to the creditors of a company for companys debts.
2) Uninterrupted Existence- Private Limited Company has 'perpetual succession', meaning uninterrupted existence until it is legally dissolved. A company being a separate legal person, is unaffected by the death or other departure of any member and continues to be in existence irrespective of the changes in ownership.
3) Borrowing Capacity- Private Limited Companies can raise equity funds in India. Companies can also issue equity shares, preference shares, debentures and accept deposits with RBI permission. Banks and Financial Institutions prefer to provide funding to a company rather than partnership firms or proprietary concerns.
Easy Transferability- Ownership of a business can be easily transferred in a company by transferring shares. The signing, filing and transfer of share transfer form and share certificate is sufficient to transfer ownership of a company. In a private limited company, the consent of other shareholders may be required to effect share transfers.
Owning Property- Private Limited Company being an artificial person, can acquire, own, enjoy and alienate property in its name. The property owned by a company could be machinery, building, intangible assets, land, residential property, factory, etc., No shareholder can make a claim upon the property of the company - as long as the company is a going concern.