Q1. What is a Private Limited Company?
A private limited company, as the name implies, is a privately owned corporate firm. It is owned by private stakeholders. In a private limited company, the liability arrangement is similar to that of a limited partnership, with a shareholder’s liability limited to the number of shares owned. The lenders cannot be found accountable for more than the value of their shares. The governing body for such a company is the Ministry of Corporate Affairs (MCA).
Section 2 (68) of the Companies Act, 2013 defines a private company as:
“A Company having a minimum paid-up share capital as may be prescribed, and which by its articles,— (i) restricts the right to transfer its shares; (ii) except in case of One Person Company, limits the number of its members to two hundred; (iii) prohibits any invitation to the public to subscribe for any securities of the company.”
Q2. Can small business get registration under the private limited company?
Yes, a small business may have its business registered in India as a private limited company. It gives them reputation and a picture of their business in the eyes of financial institutions, suppliers, and prospective clients. It enables the organisation to obtain loans with little compliance from banks or prospective customers before entering into transactions.
Q3. Is there any high qualification required to become a director or shareholder in the private limited company in India?
No, professional or educational qualification is required to become a shareholder in the private limited company. Any individual in the capacity of the person, with the sound of mind, can start a company.
Q4. What are the eligibility criteria for shareholder or director to be appointed for Private company registration in India?
The person should be of –
- Sound Mind
- Major of age
Q5. What is the Director Identification Number (DIN)?
Any person who wishes to become a director of a company must apply for a Director Identification Number (DIN). There is no special form needed to obtain a DIN from now on. The SPICe form should be used to apply for the DIN. There is no need for a special form.
Proof of identity and address proof, as well as the appropriate fee, must be requested. The DIN is usually accepted in 3-4 days. Once you get the DIN, the same can be used for the lifetime.
Q6. What will be the address of the registered office of the private limited company?
The Registered Office does not have to be owned; it can even be leased. The rented office is used to schedule general meetings, maintain paperwork, and receive communications from all levels of government on time. It also defines the registered office’s authority.
Q.7 Can we change the Registered Office of the private limited company?
Yes, after the prescribed process is done, we can conveniently alter the registered office of the firm. Depending on the circumstances, the modified address may be in the same or a separate state.
Q.8 Benefits of small businesses in private limited company in India?
It gives a company credibility in the eyes of financial firms, vendors, and prospective customers. Which makes it possible for businesses to obtain low-interest bank loans or to persuade prospective customers to enter into transactions.
Q.9 Can sole proprietorship be converted in private limited company registration in India?
Yes, a sole proprietorship may be turned into a private company registration by following the procedures outlined in the Companies Act of 2013.
Q10. Is a foreign entity allowed to be Director or shareholder of the private limited company in India?
Yes, any foreign nationals, entity or an NRI can become a director or shareholder of a private limited company in India.
Q.11 How many directors are required for private limited company registration in India?
A minimum of 2 and a maximum of 15 directors are required for private limited company registration.
Q.12 Can Private Limited Company in India have FDI or Foreign direct investment?
Yes, Private Limited Company can have FDI or Foreign Direct Investment.
Q. 13 What are the important documents required before starting up with the registration of a private limited company in India?
The most basic and important documents required before starting up with the incorporation of the company is PAN card, Aadhaar card, ID’s, photo and contact details of all the directors, bank statement, electricity bill, rent agreement with the slip or proof of ownership.
Q.14 Can a Private Limited Company suitably make FDI in India?
Well, absolutely appropriate! Private limited companies are a very common type of business company among foreign investors for making direct foreign investment (subject to FDI Guidelines)[1] in any region, through a wholly-owned subsidiary, a joint venture, and so on.