Private & Public Limited Company
A private limited company refers to a privately held, legally-recognized business entity that is owned by private stakeholders where a Public Limited Company under Company Act 2013 is a company that has limited liability and offers shares to the general public.
Eligibility
A minimum of 2 Members are required to register a Private limited company whereas a minimum of 7 shareholders and 3 directors are required to register a public limited company in India.
Document Required
An Identity Proof(Aadhar card,Driving License etc)
Address proof and PAN card details
Utility bills
DSC of directors
MOA(memorandum of association) and an Article of Association(AOA).
Benefits of Private Limited Company
Ability to raise capital through the sale of shares to the public.
Limited liability protection to its shareholders
Brand Recognition and Trust
High level of liquidity to shareholders
Benefits of Private Limited Company
liability of the shareholders is limited.
Separation of Ownership and Management
Company continues to exist even if the original shareholders pass away or sell their shares
Ability to raise capital by issuing shares to investors
Challenges for Private and Public Limited Companies
Registering a Private and Public limited company in India involves compliance with specific regulations. Here are ten common challenges faced by individuals during the registration process:
1.Understanding Company Structures:
Grasping the distinctions between private and public limited company structures, including the differences in ownership, governance, and compliance requirements.
2.Documentation Complexity:
Preparing comprehensive documentation, including the memorandum of association, articles of association, and other legal papers, and ensuring compliance with regulatory requirements.
3.Name Approval Issues:
Selecting a unique and acceptable name for the company, complying with naming guidelines, and obtaining approval from the Ministry of Corporate Affairs (MCA).
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FAQ
The process of registering a private limited company in India involves obtaining Director Identification Number (DIN) for the directors, obtaining Digital Signature Certificate (DSC), reserving the name of the company, filing the incorporation forms, obtaining the Certificate of Incorporation, and obtaining PAN and TAN for the company.
The minimum number of directors required to register a private limited company in India is two.
No, there is no minimum paid-up capital requirement to register a private limited company in India.
Yes, it is necessary to have a physical office for registering a private limited company in India. A registered office is required to be the official address of the company and must be located within India.
The compliance requirements for a private limited company in India include filing annual returns, holding annual general meetings, maintaining proper books of account, and filing income tax returns.
It takes approximately 7 to 10 working days to register a private limited company in India, provided all the necessary documents are in order.
The process of registering a public limited company in India involves obtaining Director Identification Number (DIN) for the directors, obtaining Digital Signature Certificate (DSC), reserving the name of the company, filing the incorporation forms, obtaining the Certificate of Incorporation, obtaining PAN and TAN for the company, obtaining a certificate for commencement of business, and obtaining various licenses and permits as required.
The minimum number of directors required to register a public limited company in India is three.
The minimum paid-up capital required to register a public limited company in India is INR 5 Lakh.
The minimum number of shareholders required to register a public limited company in India is seven.
A private limited company in India can have a minimum of two directors and a maximum of 200 shareholders, while a public limited company must have a minimum of three directors and a minimum of seven shareholders. A private limited company is not required to offer shares to the public, while a public limited company must offer shares to the public for subscription.
Yes, it is necessary to have a physical office for registering a public limited company in India. A registered office is required to be the official address of the company and must be located within India.
The compliance requirements for a public limited company in India include filing annual returns, holding annual general meetings, maintaining proper books of account, and filing income tax returns.
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