DIFFERENT TYPES OF PRIVATE LIMITED COMPANIES IN INDIA
If you are a person or group of persons starting a new business and getting it incorporated as a Private Limited Company and you want to know different perspectives of this type of company, then you are at the right place. When someone starts a new business, it's important to register that business. There are various types of business entities viz., public limited company, private limited company, LLP, partnership company, one-person company, sole proprietor, and section 8 company. It depends on the type of business and the requirements of the business and its members. According to their need, they can get register as any type of company.
Here, in this article, we're going to discuss the types of Private Limited companies and the registration of private limited companies online, and everything you need to know when you get into incorporation aspects.
What is a Private Limited Company?
In India, the Companies Act, 2013 permits companies to get incorporated with variable classes of liability for the shareholders and members. There are different types of Private Limited companies in India. As per the business necessities, the promoters can get the companies incorporated.
In India, there are numerous private limited organizations, the majority of the Private Limited Companies consolidated for business reasons existing are Private Limited Company – Limited by Shares. This kind of company gives major security to its individuals and is generally accepted by the most.
Now, let's know about the types of private limited companies in brief.
How many different types of Pvt. Ltd. Companies are there?
In India, there are three types of private limited companies, and those are as follows.
1. Company Limited By Shares:
When it comes to a company limited by shares, the liability of its members is limited by the Memorandum of Association (MOA) to the minimal amount of his/her offer or so much which is due. Consequently, the liability of the shareholder as for a Private Limited Company is restricted by the paid-up share capital or is limited to the shares or any amount that is due. And so the shareholder won't be held liable to pay more than his/her capital that is invested in the organization.
2. Company Limited By Guarantee:
In a Private Limited Company – limited by guarantee, the liability of the member is limited to the share of liability risked by each of the members in the Memorandum of Association. Thereupon, the members from a Private Limited Company – Limited by Guarantee won't be held accountable for a sum more than the guarantee taken by the part in the Memorandum of Association. Further, the security of the members in a Company Limited by Guarantee can be called for if liquidation occurs. At the point when the company is in a working situation, the security of the members from a Company Limited by Guarantee can't be withdrawn. A private limited company – limited by guarantee is appropriate for clubs and exchange affiliations who are working with very minimal funds.
3. Unlimited Company:
The last type of private limited company is the Unlimited company. These companies are the sorts of a company that don't have any point of limitation on the liability to their members. The liability of each of the individuals extends to the entire extent of the company's deficits and liabilities. Consequently, the creditors of an unlimited company can transfer the liability of the company to the shareholders, if company dissolves. Despite not giving the shareholders limited liability assurance, an unlimited company is still considered as a separate legal person. In this way, the members of an unlimited company are not allowed to be sued individually.
The registration process of a Private Limited Company
Step 1: Apply for Digital Signature Certificate (DSC)
Step 2: Apply for Name Reservation (SPICe+Part A)
Step 3: Fill in the details for the proposed company (SPICe+Part B)
Step 4: Drafting and Filing of the Incorporation Form.
After the process of registration completes, you will get the Certificate of Incorporation. The whole process is done online.
So, these are the types of Private limited Companies. Every type of Private Limited Company has its difference, but at the end, it works as a private company only. The main difference is in the amount of liability held by the members of the company. In essence, every type of company is considered different due to its liability consumption. The Pvt. Ltd. Company registration process is also different from the other type of companies; it is always registered online. This clarifies the differentiation among the kinds of private limited companies.
Author : Sakshi
Date : 05-Sep-2022