FAQ Of Private Limited Company

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Reading Time: 2 minutes| (Last Updated On: December 2, 2017)

FAQ Of Private Limited Company FAQ Private Limited Company

FAQ Private Limited Company

Q1. What is Private Limited Company Registration?
Answer:- Private Limited Company Registration refers to the company that offers limited liability, or legal protection to its shareholders but places certain restrictions on its ownership is Private Limited Company. These restrictions are defined in the company’s regulations or laws. The laws help in avoiding any adverse takeover attempt. A private limited company can be formed with the number of members exceeding up to 200. On the other side, minimum two persons are required in order to start a private limited company. This kind of company is considered as a separate legal entity, having perpetual succession, with liability of shareholders limited to the capital that has been contributed by them. Hence, a shareholder is not personally liable for the debts of the company.

Q2. For small businesses, what are the benefits of Pvt. Ltd. Companies?
Answer:- Private Limited Companies offer reliability or trustworthiness to businesses in financial institutions, suppliers and potential clients. As it makes easier for companies to receive loans at suitable terms from convincing potential clients or banks while making and finalising deals, these companies are trusted more than other forms of business. (1) Limited liability of shareholders to the extent of their contributed capital only. (2) Limited liability of shareholders to the extent of their contributed capital only.(3)Perpetual succession of a companycommon-question-bottom.

Q3. Is the structure of Pvt. Ltd. Company favourable for any type of business?
Answer:- Yes, private limited company form of organization is suitable for any type of business. A private limited company is known to be reliable and more trustworthy as compared to other business structures.common-question-bottom

Q4. What are the responsibilities of a director?
Answer:- Director of the Company is responsible for managing the company in an efficient way. The responsibility of a director also depends upon the kind of directorship he owns in that particular company. It is of great significance to know that responsibility of an executive director or a managing director is greater than a non-executive director who holds the directorship as an expert or consultant.

Q5. How to form a Private Limited Company?
Answer:- Any two or more members/ persons can form a private limited company. A minimum of two individuals shall act as directors of the company. The shareholders (initial members/promoters) can themselves choose to become director. It is practically seen that generally shareholders are also directors of the same private limited company filing of required documents (Director Identification number, Application for name approval, Incorporation documents such as MOA/AOA/, registered address) with the Registrar of Companies is obligatory. Apart from this, minimum capital of Rs. One Lakh is significant. (it can be used for business whenever required and does not necessarily have to be kept in bank/company deposit all the time).common-question-bottom

Q6. common-question-topWhat does Director Identification Number (DIN) imply?
Answer:- If any individual intends to become director in a company, he/she needs to apply for director identification number, issued by the Ministry of Corporate Affairs. It is a proof of identity and address, thus is required to be submitted along with required fee while submitting Director Identification Number(DIN) Application. Director Identification Number (DIN) can be approved within 3-4 days, if the documents are in an orderly manner. The best part is that approved DIN is valid for life and can be used by the director, even if he/she has directorship in more than one company.common-question-bottom.

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