When you want to provide your business a unique identity and protect it as well, company registration is the most effective process to do it. In India, a private limited company is a popular way to carry on a business intended for making a profit while shouldering limited liability. But before you proceed to register your company as private limited, there are a few things that you must become aware of. Mentioned below are 6 things that you need to know about private limited company registration in India.
There is no minimum capital requirement for registration
Gone are the days when the shareholders of a company had to pay at least Rs. 1 lakh as a subscription amount to get their business the status of a private limited company. At present, businesses in India do not need to fulfill any such minimum capital requirement for registration.
You need at least two individual directors
As per the Companies Act, 2013, to register a company as private limited there has to be a minimum of two individual directors. Out of these, at least one director must be a resident of India. This means, one of the directors must have stayed in India for at least 182 days in the previous financial year.
There must be at least of two shareholders
To register a business as a private limited company, there must be at least two shareholders. A company’s shareholders are its owners who possess various rights, including the appointment and removal of the directors. It’s not necessary that the shareholder be a person. A shareholder can also be another company, which may or may not be located in India.
A director can also be a shareholder
In a private limited company in India, a person can act in the capacity of both the director and as a shareholder. But the same rule does not hold true for a body corporate shareholder. In other words, a body corporate shareholder does not have the right to occupy the position of a director.
The maximum number of members can be 200
While there must be a minimum of two shareholders in a private limited company, the maximum number of members can go up to 200. So, for a business to be registered as a private limited company, the number of shareholders must range between 2 to 200.
Shares cannot be traded on the stock exchange
A private limited company’s shares cannot be listed on the stock exchange. If your plan is to list your company’s shares on the stock exchange, then you will have to opt for a public limited company registration. A private limited company registration does not allow you to be listed or traded on the stock exchange.
Registering your company as private limited will help you to turn your business dreams into a reality. You can seek the help of Quickcompany to ensure easy and swift registration of your business as a private limited company in India.