Two Directors: A private limited company requires a minimum of two directors, with an upper limit of 15. At least one director must be a resident of India, ensuring a local presence in the leadership.
Minimum Capital Contribution: Contrary to common misconceptions, there is no stipulated minimum capital requirement for a private limited company. However, it's recommended to have an authorized capital of at least Rs.1 lakh to facilitate smooth business operations.
Unique Name: Selecting a distinctive and exclusive name is crucial. The proposed company name should not mirror any existing company or trademark, ensuring uniqueness and avoiding potential legal complications.
Registered Office: The registered office of the company doesn't need to be a commercial space; it can even be a rented residence. However, obtaining a No Objection Certificate (NOC) from the landlord is imperative, ensuring flexibility in choosing the business address. This flexibility allows businesses to operate from various locations, adapting to their evolving needs.
Limited Liability: Private companies offer the invaluable benefit of limited liability to their shareholders. This means that the financial responsibility of shareholders is restricted to the value of the shares they hold, shielding personal assets from business-related liabilities.
Raising Capital: Despite the legal complexities involved in company registration, entrepreneurs favor this structure due to its ability to attract funds through equity. This facilitates the infusion of capital from investors in exchange for shares, aiding in business growth and expansion.
Separate Legal Entity: A private company is recognized as a distinct legal entity, separate from its owners, in the eyes of the law. This separation ensures that the company's existence remains unaffected by the life events or cessation of its shareholders. The company operates independently, enhancing stability and continuity.
Trustworthiness: The registration process with the Registrar of Companies (ROC) instills trust and credibility. Details about a company's standing and compliance can be easily verified through the Ministry of Corporate Affairs (MCA), promoting transparency and accountability.
Perpetual Succession: One of the notable attributes of a private company is its perpetual succession. Regardless of changes in ownership or membership, the company persists until it undergoes legal dissolution. This perpetual existence, coupled with separate legal entity status, adds to the company's long-term viability and resilience.
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