Private Limited Company

Private Limited Company is the most popular form of business entity in India and also among foreign investors. To incorporate a private limited company, a minimum of two shareholders are required and can have up to a maximum of 200 shareholders. A private limited company must have a minimum of two Directors and can have upto a maximum of fifteen Directors. The Director needs to be over 18 years of age and must be a natural person, there are no limitations in terms of citizenship or residency. Therefore, foreign nationals can be directors in a Indian Private Limited Company. Minimum of one lakh authorised capital is required to form a private limited company in India. A foreign Company can hold shares of a Private Limited Company in India subject to Foreign Direct Investment (FDI) Guidelines.

A private limited company has all the advantages of partnership namely flexibility, greater capital combination of different and diversified abilities, etc., and at the same time it has advantages of limited liability, greater stability and legal entity. In this sense, a private limited company stands between partnership and widely owned public company. Once a Company is incorporated, it will be active and in-existence as long as the annual compliances are met with regularly.