What is a private limited company

A private limited company is a business entity in "private" ownership. Members’ contribution constitute the registered capital in a Private Limited  Company and the liability of the members is limited to the amount of their registered capital which is amount of shares held by them. Shares of a Private Limited Company cannot be publically traded.

Characteristics of Private Limited Company

Members - A minimum of 2 members and a maximum of 200 members are required to form a company as stipulated by the Companies Act 2013.

Limited Liability - The liability of each member or shareholder is limited to the amount of their registered capital which is amount of shares held by them. This means shareholders' personal and individual assets are not at risk.

Perpetual succession - The company continues to exist before the law even if one of its members dies, company becomes insolvent or goes bankrupt. The life of a company lasts forever.

Number of Directors and Shareholders - A private companies need minimum two which can be maximum upto 15 directors.  In Case of shareholders, a Private Limited Company nees minimum two shareholders which can be maximum upto 200 shareholders.

Name - All private companies must use the word Private Limited after their name

Registered Office Address – During company registration, the owner may provide a temporary company address until the company is registered. After a company is registered, its registered office must be updated with the registrar of the company. A company's registered office is where the company's main affairs are conducted and all documents are kept.