Private Limited Company

Limited Liability means the status of being legally responsible only to a limited amount for debts of a company. Unlike proprietorships and partnerships, in a limited liability company the liability of the members in respect of the company’s debts is limited. In other words, the liability of the members of a company is limited only to the extent of the face value of shares taken up by them. .

Shares of a company limited by shares are transferable by a shareholder t any other person. The transfer is easy as compared to the transfer of interest in business run as a proprietary concern or a partnership. Filing and signing a share transfer form and handing over the buyer of the shares along with share certificate can easily transfer shares. .

To sue means to institute legal proceedings against or to bring a suit in a court of law. Just as one person can bring a legal action in his/her own name against another in that person’s name, a company being an independent legal entity can sue and also be sued in its own name. .

A company enjoys better avenues for borrowing of funds. It can issue debentures, secured as well as unsecured and can also accept deposits from the public, etc. Even banking and financial institutions prefer to render large financial assistance to a company rather than partnership firms or proprietary concerns. .

A company has ‘perpetual succession’, that is continued or 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 but continues to be in existence irrespective of the changes in membership. Perpetual succession is one of the most important characteristics of a company. .

Directors and shareholders must obtain a Digital Signature Certificate (DSC) to sign electronic documents during the registration process.

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Directors must obtain a Director Identification Number (DIN) from the MCA, which is a unique identification number.

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Submit an application to the MCA for approval of the proposed company name, ensuring that it is unique and not similar to any existing companies.

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File incorporation documents with the MCA, including the Memorandum of Association (MoA), Articles of Association (AoA), and other required forms.

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Once the MCA approves the incorporation documents, it issues a Certificate of Incorporation, which is the legal proof of the company's existence.

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Yes, a foreign national can be a director or shareholder in a Private Limited Company in India, subject to compliance with the Foreign Exchange Management Act (FEMA) and other applicable regulations. .

The time taken to incorporate a Private Limited Company in India can range from 10 to 15 working days, depending on the processing time of the MCA and the availability of the required documents. .

It is mandatory for a Private Limited Company to have a company secretary if its paid-up capital exceeds INR 5 crores. However, for companies with a paid-up capital of less than INR 5 crores, appointing a company secretary is not mandatory. .

No, a Private Limited Company must have a minimum of two directors and two shareholders. If you wish to establish a company with only one director and shareholder, you can opt for a One Person Company (OPC) instead. .

Yes, a Private Limited Company must adhere to annual compliance requirements, which include filing annual returns with the MCA, maintaining statutory registers, conducting annual general meetings, and filing income tax returns. .

Yes, a Private Limited Company can be converted into a Public Limited Company or other business structures such as a Limited Liability Partnership (LLP), subject to fulfilling the necessary requirements and obtaining approvals from the relevant authorities. .