Under the Companies Act, 2013, a private company must have at least two directors, with a maximum of 200 directors.
Benefits of Incorporating a Private Limited Company
- Partnerships, for example, are liable for any debts incurred by all partners. The partners will have to sell their personal assets if the partnership cannot repay its debts. The directors and shareholders of an individual company, on the other hand, are always protected from business-related dangers because only the money invested in the company may be lost.
- Equity financing is a common function of private limited companies. In addition, these companies are limited in liability. In addition, venture capitalists and private equity firms are uneasy about investing in other forms of corporate structure. A private limited company also allows businesses to hire elite personnel that they could not otherwise afford.
- It is possible to sell or transfer a private limited company in India either partially or completely without disrupting the business.
- Public information about the structure, operations, and finances of a private limited company is made available by the Registrar of Companies. Eventually, this information becomes public information. The vendor, lender, employee, and the general public can now access all the firm’s additional information, such as authorized capital, director names, and registered address. A private limited company’s ability to provide this information puts it at an advantage over other companies (like partnerships and sole proprietorships) that are not required to.
- LLPs have fewer borrowing options than private limited companies. Private limited companies have the option of issuing debentures or convertible debentures, which are easier to obtain compared to OPCs and LLPs.
Minimum Number of Members Permissible in a Private Limited Company
- A private limited company can be formed with as few as two members, according to the Companies Act 2013.
Maximum Number of Members Permissible in a Private Limited Company
- A private limited company can have up to two hundred members according to the Companies Act 2013.
Seek Corporate Law Advice From The Best
For a hassle-free and timely incorporation, we recommend you consult with a competent lawyer, such as Vakilsearch.
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