A Private Limited Company (Pvt. Ltd.) in India is a popular business structure, particularly among small to medium-sized enterprises. This type of company is governed by the Companies Act, 2013 and is characterized by limited liability, meaning shareholders are only liable for the company’s debts up to the amount they have invested. Additionally, a Pvt. Ltd. company is a separate legal entity, which means it can own property, incur debts, and be involved in legal proceedings independently of its owners. This structure ensures perpetual succession, meaning the company continues to exist even if ownership changes due to the death or departure of shareholders. It must have at least two shareholders and can have up to 200, excluding employees, with restrictions on the transferability of shares to maintain control within a small group.

The benefits of a Pvt. Ltd. company include ease of raising capital through equity, enhanced credibility and trust among stakeholders, and access to various tax benefits. The management is separate from ownership, which allows for professional handling of business operations. However, the Pvt. Ltd. company also faces disadvantages such as stringent compliance requirements, higher costs of formation and maintenance, and restricted liquidity due to limited transferability of shares. The process of incorporation involves name approval, obtaining digital signatures and director identification numbers, preparing necessary documents, filing with the Registrar of Companies, and applying for PAN and TAN. Despite the rigorous compliance, the advantages of a Pvt. Ltd. company make it an attractive option for many entrepreneurs in India.

MINIMUM REQUIREMENTS OF COMPANY REGISTRATION

• Minimum 2 Shareholders
• One of the Directors must be Indian Resident
• DSC (Digital Signature Certificate) for 2 Promoters & 1 witness
• Minimum 2 Directors
• Suggested Authorized Share Capital 20,000 (INR Twenty Thousand)
• The directors and shareholders can be same person
• DIN (Director Identification Number) for all Directors

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