What is a Private Limited Company?

Private Limited Company,

The most popular legal structure for businesses, should be chosen by anyone looking to build a scalable business. Indian start-ups and growing companies pick it because it allows outside funding to be raised easily, limits the liabilities of its shareholders and enables them to offer employee stock options to attract top talent.Private Limited Companies are closely held companies where minimum number of members is two and maximum number is Two hundred.

A private limited company has the Limited Liability of members, greater Stability and Separate legal entity &has all the advantages of partnership namely flexibility, greater capital combination etc.

Private companies may issue stock and have shareholders. However, their shares do not trade on public exchanges and are not issued through an initial public offering.Shareholders may not be able to sell their shares without the agreement of the other shareholders. Scope of expansion is higher because easy to raise capital from financial institutions and the advantage of limited liability.

In this sense, a private limited company stands between partnership and widely owned public company. Identifying marks of a private limited company are name, number of members, shares, formation, management, directors and meetings, etc.Pvt. Ltd places certain restrictions on its ownership that are defined in the company’s bylaws or regulations and are meant to prevent any hostile takeover attempt.

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