What is Private Limited Company?
Private Limited Company is the most popular, prevalent and well recognized type of Business form all over the world. In India, a Private limited company is governed by Companies Act, 2013 and rules framed thereunder. For Incorporation of a private limited company, a minimum of two shareholders and two directors are required. An Individual person can be both a director and shareholder, while a corporate legal entity can only be a shareholder in the Private Limited Company. Further, NRIs, foreign nationals, foreign corporate entities are permitted to be a Directors and/or Shareholders of a Company with Foreign Direct Investment, making it the favorite option for foreign promoters.
Separate Legal entity, Limited Liability of Members, Perpetual Succession, privileged Loan funding make the Private Limited Company as the well recognized form of Business all over the world either it is closely held or family owned. Start-ups and growing companies prefer private limited company as it allows outside funding to be raised easily, limits the liabilities of its shareholders and enables them to offer employee stock options to pull in top talent.