Private Limited Company Incorporation
Suppose a company is desirous of becoming a Private Limited Company. In that case, the company must arrange any seven or more persons associated for any lawful purpose. And they must subscribe their names to a memorandum of association. Also, they must comply with the requirements of the Companies Act in respect of registration. Such companies can form an Incorporated Company with limited liability. Such a Pvt Ltd registration can be one of the following:
Eligibility Criteria for Private Limited Company Registration in India
- Minimum two directors
- Minimum two shareholders
- At least one director should be from India
- Maximum 200 shareholders.
Pvt Ltd Registration is limited by Shares
A Pvt Ltd Company can have the liability of its members by the Memorandum to the amount unpaid on the shares that the members them, i.e. A PLC which limits its members by its shares.
Pvt Ltd Registration is limited by a Guarantee
A Pvt Ltd Company can have the liability of its members limited by the Memorandum to such amount which the members can undertake by the Memorandum to contribute to the assets of the company in the event of its being wound up, i.e. the PLC is limited by guarantee.
Memorandum of Association
The Memorandum of every Private Limited Company must state the following:
- The name of the company with “Private Limited” as the last words of the name
- The State in which the registered office of the company is to be situated
- In the case of a company in existence immediately before the commencement of the Companies (Amendment) Act, 1965 (31 of 1965), the objects of the company
- In the case of a company formed after such commencement:
- The main objects of the company to be pursued by the company on its incorporation. Also, they must pursue the object incidental or ancillary to the attainment of the main objects
- Other objects of the company not included
- In the case of companies (other than trading corporations), with objects not confined to one State, the States to whose territories the objects extend
- In a Memorandum, the Private Limited Company must limit its members by shares or by guarantee. Also, they must state that the PLC limits the liability of its members.
Memorandum for limited by guarantee
The Memorandum of a Private Limited Company, which its member by guarantee must also state that each member undertakes to contribute to the company’s assets if it winds up. At the same time, he is a member or within one year after he ceases to be a member for the following:
- Payment of the debts and liabilities of the company
- Payment of such debts and liabilities of the company as may have been contracted before he ceases to be a member
- Payment of the costs, charges and expenses of winding up
- Payment for adjustment of the rights of the contributories among themselves; amount as required but not exceeding a specified amount
Share Capital
In the case of a Private Limited Company having a share capital:
- Unless it is an unlimited company, the Memorandum must state the amount of share capital with which the applicant must register the company and the division of it into shares of a fixed amount
- No subscriber of the Memorandum must take less than one share
- Each subscriber of the Memorandum must write opposite to his name the number of shares he takes
Memorandum Form
The Memorandum of association of a company must be in one of the Forms in Tables B, C, D and E in Schedule I as apply to the case of the company or in a Form as near as the circumstances admit.
Also Read: Business struggled to import license life supports during the COVID
Printing And Signing of Memorandum
The company applicant must maintain the following in relation to the Memorandum:
- The applicant must print the Memorandum.
- The applicant must divide the Memorandum into paragraphs numbered consecutively, and
- The applicant must sign the Memorandum by each subscriber (who shall add his address, description and occupation, if any) in the presence of at least one witness who will attest to the signature and likewise add his address, description and occupation, if any.
In order to keep up with these requirements, you need the assistance of the business experts. Additionally, the process of private limited company registration in India is something that only experts like CA or CS should handle.
