The Companies Act on 1956 has undergone several changes since its inception and the recently asserted Companies Act 2013 is in force with amendments in 2015 and 2016. Accordingly, the definition and scope of private companies were also revised in the recent times.The details mentioning here are conformed to the recent Act.
A Private limited company is a separate legal entity, under the Companies Act. It is the most popular corporate entity amongst small, medium and large businesses in India due to various advantages.
By virtue of section 2(68) of the Companies Act, 2013, a private company means a company, which has an authorise capital of 100000 rupees or higher, as may be prescribed, and by its articles:
Note: Only the number of members is limited to 200; a private company may issue debentures to any number of persons, the only condition being that an invitation to public to subscribe to debentures is prohibited.
A private limited company is one type of business structure which has some reasons to opt. The benefits of the private company include:
To know more benefits visit Advantages of Private Limited Company
A private limited company is the most common form of business entity which has its own shortcomings. Some of the drawbacks of private limited company are:
To read more visit Disadvantages of Private Limited Company
To read the whole registration process visit Private Limited Company Registration Procedure
As per Income Tax Act 1961, All the companies are liable to pay income tax at the flat rate of 30% on total net income plus cess at the effective rate of 3%. There are separate tax requirements for legal bodies and Individuals. The provisions of MAT ( Minimum Alternate Tax) and dividend distribution tax are also applicable to private limited company.
To read more tax provisions visit Private Limited Taxation
Private Limited Company can be converted into various types of Business, which are registered under Companies Law. All the conversion rules are contained under Companies (Incorporation) Rules, 2014. Conversion of Private Limited Company can be done by altering the MOA and AOA of the company.
To know the conversion process visit Converting a Private Limited Company
There are some Mandatory compliances which have to be done by every private limited company. Directors of the company are liable to comply with the compliance duty otherwise it will attract huge penalties.
Some mandatory compliances are:-
To read more visit Private Limited Company Compliances
Every entrepreneur who is planning to start a business, the first and foremost question come in mind is the type of business entity is to be formed. Although private limited company is the trending business entity amongst the startups but a comparison among the business entities clear the vision.
To know the comparison visit Private Limited Comparison