What is a Private Limited Company?
Private limited company is a voluntary association of not less than two and not more than 200 members / shareholders, whose liability is limited, the transfer of whose shares is limited to its members and company is not allowed to invite the general public to subscribe to its shares or debentures.
Private Limited Companies are those types of companies where minimum number of members is two and maximum number is not more than 200. A private limited company has the limited liability of members but at the same time it has many characteristics as those of a partnership firm. A private limited company has all the advantages of partnership namely flexibility, greater capital combination of different and diversified abilities, etc., and at the same time it has advantages of limited liability, greater stability and legal entity. In this sense, a private limited company stands between partnership and widely owned public company. Identifying marks of a private limited company are name; number of members, shares, formation, management, directors and meetings, etc.,the maximum number of directors shall have to be mentioned in the Articles of Association.
Separate Legal Entity:- A company is a legal entity and a juristic person established under the Act. Therefore a company form of organization has wide legal capacity and can own property and also incur debts. The members (Shareholders/Directors) of a company have no liability to the creditors of a company for such debts.