The discussion is on Private Limited Company, which can be wholly owned Indian company or a wholly owned subsidiary of a foreign company or a joint venture between foreign and Indian company or a wholly owned foreign company.  Private limited company should have a minimum of two directors.
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Feature of Private Limited Company:

• Private limited company to register with Ministry of Company Affairs/ ROC (Registrar of Companies).
• The company to incorporate itself has to have a name approval.  If the name is available, the same shall be approved.
• Artificial legal person.  The private limited company is an artificial person in the eyes of law.  That means that it is an independent person.
• Separate legal entity.  The private limited company is an artificial juridical body established under Companies Act by Directors and Shareholders.  The company is an independent body where it can possess and buy properties, incur debts and spend.
• Perpetual succession.  The death, insanity, change in membership, bankruptcy etc will not impact the continuity to exist until legal takes the decision.
• Limited liability.  The liability of the shareholders are limited to the shares in the company.  However, directors extending personal guarantee additionally will have unlimited liability.
• Equity:  The company can raise funds through equity, private equity, stock exchange etc.
• Restriction on share transferability.  Transferability of shares is unchallenging. Hence entrepreneurs opt to start as a private limited company.  The shares can be transferred within India or outside but governed by shareholders’ agreement and article of association.
• Owning assets:  The company can own and transfer any kind of assets.

Details and procedure of private company registration:

• Minimum of two promoters required
• Putting together the objects of the company.
• Drafting Memorandum & Article of Association
• Apply for name clearance.
• Procure a DSC (digital signature certificate) 
• PAN card of the promoters.
• Aadhar card of the promoters.
• Address proof of the promoters.
• Rental agreement in the name of the Company.
• Electricity bill of the current month of the rented premise
• Proposed authorised capital.  Number of shares and face value of each share.
• Proposed paid-up capital.  Number of shares allotted to each promoter for shareholders. 

Procedure for company registration:
• Apply for name clearance.
• Apply for company registration with draft MOA (Memorandum of Association) and AOA (Articles of Association).
• Pay the prescribed fees.
• If no objection, ROC will allot incorporation.  If any objections, we need to rectify it for completion of the process.
Other Features:
• Private limited company can be converted to public limited company, OPC, LLP
• Private limited company should have 2 directors and maximum 15 directors.  The shareholders are restricted to 200 in total for a pvt ltd company.

Conclusions:  So, a private limited company is the most ideal form of business registration as it allows for maximum growth, helps joint ventures, subsidiaries, etc.

Stay tuned for Other forms of Private Limited  Companies, which will be a Public Limited Company.

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