Udyogwardini |Private Limited Company Formation

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private limited company

What is Private Limited Company Formation?

A Private Limited Company is legally formed with Limited Liability and Legal Protection for its stockholders, but its ownership is restricted. A Private Limited Company (PLC) is a privately held company for small businesses. The responsibility of members of a Private Limited Company is limited to the number of shares that they own. The shares of a Private Limited Company cannot be exchanged publicly.

The most simple and often used form of business registration in India is the private limited company. It requires a minimum of two persons to register. It is the most recommended type of business structure for millions of small and medium-sized firms that are family-owned or professionally managed due to its limited liability protection for shareholders, capacity to obtain equity funds, and independent legal entity status.

What is Private Limited Company Formation?

A Private Limited Company is legally formed with Limited Liability and Legal Protection for its stockholders, but its ownership is restricted. A Private Limited Company (PLC) is a privately held company for small businesses. The responsibility of members of a Private Limited Company is limited to the number of shares that they own. The shares of a Private Limited Company cannot be exchanged publicly.

The most simple and often used form of business registration in India is the private limited company. It requires a minimum of two persons to register. It is the most recommended type of business structure for millions of small and medium-sized firms that are family-owned or professionally managed due to its limited liability protection for shareholders, capacity to obtain equity funds, and independent legal entity status.

Here are some benefits of Private Limited Company Formation:

  • A Private Limited Company can be started with no minimum capital. The total Authorized Share Capital of a Private Limited Company can be as low as Rs. 10,000.
  • It implies that if the company runs into financial difficulties as a result of normal commercial operations, creditors will not be able to seize the personal assets of shareholders.
  • To start a company, only two shareholders are required. The maximum number of shareholders allowed is 200, so more capital can be raised.
  • Due to the ease with which financial institutions can raise capital and the benefit of limited liability, the scope of expansion is greater.
  • The value of the company's brand will grow as more people get familiar with it.
  • Because the share price represents the company's financial health, determining a value in the event of a merger or acquisition would be simple.

Documents Required for Private Limited Company Formation:

Photograph of all the Directors

PAN Card of all the Directors

ID Proof of all the Directors (Driving License/Passport/Voter ID)

Electricity Bill or any other utility bill for the address proof of the Registered Office

Self Attested Residential Address Proof of all the partners (Electricity Bill/Latest Bank Statement/Mobile Bill) (not older than 2 months)

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