Things You Need To Know About Private Company Limited Registration

Posted by Mark Will on November 5th, 2019

A company which is privately held for small businesses is referred to as a private limited company. The shares of private limited company cannot be publically traded, and the liabilities are limited to the number of shares held by the privately held companies. The private limited company registration requires: -

• A minimum of two members and a maximum number of 200 members
• A minimum number of two Directors, one of which must be a resident of India which means he/she should have at least stayed 182 days in a previous year calendar
• One of the major requirements is the name of the company. The name of the company consists of three parts- the name, the activity and the private limited company. A company should send more than 5 names for approval and each name should be unique and should not bear resemblance with any other company
• While undergoing the registration process, the owner of the company should provide with a temporary company’s address until their company gets fully registered
• As in today’s digital era, every document can be submitted electronically. So, while getting involved in private company limited registration, the owner should obtain a digital signature certificate which offers verification for the authenticity of the documents

Benefits Of Private Limited Companies

• After registering a private limited company, you get ownership of your company, and so you can sell the shares to the public on an open market.
• One advantage is that you will have minimum shareholders. For a private company, the minimum number of shareholders is 2 whereas a public company has a minimum of 7 shareholders
• Private companies have shorter legal formalities as compared to public companies
• Private companies do not need to disclose their financial reports which are not the case with public companies as they need to disclose such information which sometimes affects their public investment
• Managers of private companies are more focused in short and long term business decisions instead of increasing the value of shares
• Private companies do not have stock market pressure, so they do not have to worry about shareholder’s expectations
• Registering in a private company gives the managers a chance to focus on long term earnings, and they do not have to worry about minimum share capital

It can be seen that a private limited company is less time consuming and less complicated. For more information on private limited company registration you can seek help online.