A company, abbreviated as co., is a legal entity made up of an association of people, be they natural, legal, or a mixture of both, for carrying on a commercial or industrial enterprise. Company members share a common purpose, and unite in order to focus their various talents and organize their collectively available skills or resources to achieve specific, declared goals. Companies take various forms, such as: Public Limited Company & Private Limited Company.
A private limited company, or PVT. LTD., is a type of privately held small business entity. This type of business entity limits owner liability to their shares, limits the number of shareholders, and restricts shareholders from publicly trading shares. To start a company, a minimum number of 2 members are required. The liability of each member or shareholders is limited. It means that if a company faces loss under any circumstances then its shareholders are liable to sell their own assets for payment. The personal, individual assets of the shareholders are not at risk. The company keeps on existing in the eyes of law even in the case of death, insolvency, the bankruptcy of any of its members. This leads to perpetual succession of the company. The life of the company keeps on existing forever. A private company has a privilege over the public company as they don’t have to keep an index of its members whereas the public company is required to maintain an index of its members. When it comes to directors a private company needs to have only two directors. With the existence of 2 directors, a private company can come into operations. It must have a minimum paid-up capital of Rs. 1 lakh or such higher amount which may be prescribed from time to time. Prospectus is a detailed statement of the company affairs which is issued by a company for its public. However, in the case of private limited company, there is no such need to issue a prospectus because in this public is not invited to subscribe for the shares of the company. It is the amount receive by the company which is 90% of the shares issued within a certain period of time. If the company is not able to receive 90% of the amount then they cannot commence further business. In case of private limited company shares can be allotted to the public without receiving the minimum subscription. It is mandatory for all the private companies to use the word private limited after its name. Advantages: ownership, minimum number of shareholders, legal formalities, disclosing information not required, Management and decision making becomes easier, private company are more flexible in the short term and long term business decisions. Private companies are not pressurized by the stock market. Private companies can focus on longterm earnings. Minimum share capital.
Members-> A minimum number of two and a maximum number of 200 members or shareholders are required as per
the companies’ act 2013 before registration of the company.
Directors-> A minimum number of two directors is required for registering the private limited company. Each of the directors should have DIN i.e. director identification number which is given by the ministry of corporate affairs.
Name-> It is one of the major components for a private limited company. The name of the company contains three parts i.e. the name, the activity and private limited company. It is necessary for all private company to use the word private limited company at the end of its company name.
Registered office address-> While going for the registration of the company, the owner should provide the temporary address of the company until it does not get register.
Obtaining digital signature certificate-> In today’s modern world everything is done online. All documents are submitted electronically and for that, every company must obtain a digital signature certificate
Professional certification-> In a company there are many professionals which have required for many purposes.