What is Private Company?

As per section 2(68) of the companies act 2013, a private company has three restrictions in its articles of association (Articles of association or AOA are the basic documents which govern the rules and regulations of the company):
  1. The number of members shall be limited to 200.
  2. The right to transfer the shares shall be restricted. This means that the shares can not be easily transferred. This is to ensure that the limit of maximum members do not cross 200.
  3. The company can not raise money from public by inviting them through prospectus.
So, basically starting a Private company is a better option for those businesses where the capital required is not more and is contributed by selected people (not exceeding 200). The term private here indicates that raising money here is more of a private affair and general public is not involved.
The basic difference between Private Company vis a vis Public Company is number of compliance or approval a Company required. Private Company, obviously as compared to Public Company, has limited number of Approvals and Compliance requirement.

Comments

  1. Anonymous24 August 2021 at 15:48

    We have been using Mr Benjamin financial team to help secure our first acreage block. We are happy with the professionalism In Financial Services Mr Benjamin and his loan company brings to the table with the loan rate of 2% interest rate that we use to get our loan from Mr Benjamin we are also doing a separate construction loan with them. Everything has been a breeze with the team behind Mr Benjamin which is  100%  of the way, and no question is too silly to ask. Would recommend this Loan officer to anyone looking for a loan at the low rate of 2% RIO!! Email Mr Benjamin and his team today for any kind of loan 247officedept@gmail.com      Whats-App Number  +1-989-394-3740

    ReplyDelete

Post a Comment

Popular posts from this blog

What is Corporate Identity Number (CIN)?

Image
Corporate Identity Number ( CIN ) , is a unique 21 digit Alpha-Numeric Code issued by Ministry of Corporate Affairs (MCA) for all the Companies registered under Companies Act, 2013.  Here in the example above, we have taken CIN of Reliance Industries Limited (RIL) from MCA Website  and code is broken into different categories for reader to understand the structure of CIN with ease. 1) Listing Status - First Alphabet First Letter (alphabet) of CIN suggests Listing Status of the Company. Where L  indicates, the Company is listed on recognised stock exchange in India and U indicates it is unlisted Company 2 to 5) Industry Code - next 5 numbers Immediately, after Listing status, CIN has 5 numeric digits which represents Industry Code of the Company. Every Company, registered under Companies Act, 2013, has a Main Object. All those main objects are divided into few broad categories and these 5 digits represents the major activity or the industry of the C...
Read more

Conversion of LLP into Company

The concept of Limited Liability Partnership (LLP), was introduced in India by way of Limited Liability Partnership Act, 2008 and LLP Rules, 2009. As name suggest, in case of LLP, all partners have limited liabilities.  LLP is hybrid of Partnership Firm and Company, it is an alternative corporate form of business organization which gives the benefits of limited liability of a Company and the flexibility of a Partnership. As per LLP Act, read with relevant Rules, any other form of business such as a partnership set up under the provisions of Indian Partnership Act, 1932, a private limited company and an unlisted public limited company can convert itself into LLP pursuant to the provisions of LLP Act, 2008. However, neither of LLP Act nor Companies Act, 1956 provided a provision for conversion of LLP into Private Limited Company. However, with Companies Act, 2013 a provision of conversion of LLP into Private Company was introduced under Section 366 of the Companies Act, 2013...
Read more

Non Appointment of Company Secretary – NCLT fines Rs. 339,000 to the Company for inadvertent delay

Atyati Technologies Private Limited (The Company) was incorporated under Companies Act, 1956 as a Private Limited Company with Registered Office in Bangalore. The Paid-up capital of the Company was Rs. 8.81 Crores. As per Rule 8A, it is mandatory for every company to appoint a Company Secretary in all the Companies having Paid up capital of Rs. 5 Crores or more. The Company filed a suo-motto filed a petition under Section 203 of the Companies Act, 2013 (The Act) read with Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 with a prayer for compounding violation committed under Section 441 of the Act. The Company pleaded that though since the commencement of new Companies Act, 2013, i.e. April 01, 2014 the Company could not appoint any Professional as a CS as no CS was willing to work with the Company as Company being a Private Limited Company there was very limited scope of work. As per Section 203 (5), if a company contravenes the provision...
Read more