Section 2 (68) states that a private company means a company having a minimum paid up share capital as may be prescribed, and which by its articles:
- restricts the right to transfer its shares;
- limits the number of its members to two hundred;
- prohibits any invitation to the public to subscribe for any securities of the Company:
Points to be kept in mind before incorporation of a Private Limited Company:
Decide regarding the proposed name to be applied, objects to be carried by the Company, proposed registered office address, authorized capital, Number of promoters, number of directors, and number of shares to be subscribed by each promoter.
The name of the company should be in consonance with the principal objects of the company as set out in the memorandum of association. Every name need not be necessarily indicative of the objects of the company, but when there is some indication of objects in the name, then it shall be in conformity with the objects mentioned in the memorandum. [Rule 8(2)(b)(ii) of Companies (Incorporation) Rules, 2014]
The proposed name should not fall in the ambit of undesirable names specified in Rule 8 of Companies (Incorporation)Rules, 2014
The Company must have a minimum Paid up Share Capital as may be prescribed. [Section 2 (68)]
There must be at least 2 subscribers to the memorandum. [Section 3(1)(b)]
Maximum number of members allowed is 200 members [ section 2(68)]
Minimum number of Directors required is 2 Directors with a maximum limit of up to 15 Directors. A Company may appoint more than 15 directors after passing a special Resolution in a general Meeting. [Section 149(1)(a) (b)]
Every company shall have at least one director who has stayed in India for a total period of not less than one hundred and eighty-two days in the previous calendar year.[(Section 149(3)]
Restrictive provisions given under definition of Private Company [Section 2(68)] should be taken care of and be included in the Drafting of Memorandum and Articles of Association of Company.
All the Directors should have valid DIN. (In case the proposed directors don’t have a Director Identification number (DIN) allotted to them, Pl. Ref. procedure for DIN Application.)
Digital Signature for any one of the Director is required to digitally sign the E-Forms to be submitted with the Registrar of Companies.
Know More: – Procedure for Incorporation of Private Limited Company
