Private Limited Company

A Private Limited Company is the most popular business structure among startups, SMEs, and growth-oriented businesses in India. Governed by the Companies Act, 2013, it is a separate legal entity with a distinct existence from its shareholders and directors. It requires a minimum of two directors and two shareholders (who may be the same persons), with a maximum of 200 shareholders. The structure restricts share transfers and prohibits public subscription. It has perpetual succession, separate legal identity, and the ability to raise equity funding from angels and VCs. It must hold annual general meetings, maintain statutory registers, file annual returns with the ROC, and have accounts audited by a CA. It is taxed at the flat corporate tax rate.

Key Benefits

• The most investor-friendly structure: VCs, angels, and institutions prefer to invest in private limited companies.
• Limited liability for all shareholders: personal wealth is fully protected from company debts.
• Separate legal identity: the company can own property, sue and be sued, and enter contracts independently.
• Ability to issue ESOPs to attract top talent and retain key employees.
• High credibility with banks (better loan terms), clients, government departments, and international partners.

How We Support

• We handle end-to-end incorporation: DIN, DSC, name approval, MoA, AoA, and Certificate of Incorporation.
• We provide ongoing statutory compliance: board meetings, annual returns, ROC filings, and share allotments.
• We conduct mandatory statutory audits and prepare financials as per Companies Act requirements.
• We assist with ESOP structuring, shareholder agreements, and investor-ready documentation.

Limitations to Consider

• Higher compliance burden compared to LLP or partnership: mandatory board meetings, AGM, ROC filings, and statutory audit.
• At least two directors and shareholders are required, so it cannot be a single-person structure.
• Cannot make a public offer of shares: raises capital only through private placements.
• Director disqualification risk if filings are not done, which impacts the ability to serve on other boards.

Talk to Our CA Experts About Your Specific Needs

From queries to execution, we guide you through each stage of compliance, making the process simple, structured, and stress-free. Call +91 89588 89589 or write to connect@89tca.in for a free consultation.