If you need further clarification regarding the process of our working, do watch this video. It is a step by step guide to understand how to apply for Private Limited Company.
Private Limited Companies are regulated under the company's Act 2013 and the Companies Incorporation Rules, 2014. It is a prevalent and popular business option in India as it gives separate legal identity, Limited liability, more transparency, and international recognition to the business. The ownership of the company is divided among various shareholders (Max upto 50) as per there capital investment into the business as share capital.
A Private limited company has a separate legal entity. It owns the name, act under the name and has a seal of its own and its assets are sperate and distinct for those of its member.
The privilege of limited liability for business debts is liability of a member as shareholder extends to the contribution to the capital of the company up to the nominal value of the shares held and not paid by him.
Shares of a company limited by shares are transferable by a shareholder to any other person. Filing and signing a share transfer form and handing over the buyer of the shares along with share certificate can easily transfer shares.
The life of the Company is not dependent on the life of its founders or its members. Even if the members, for that matter even all members, become bankrupt/insolvent, the company remains unaffected.
A company 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.