Private Limited Company

Private Limited Company

The growth of trade and business led to many problems that traditional forms of business did not solve. For example, the unlimited liability feature of a sole proprietorship form of business resulted in people forming partnerships, but even that proved to be too inadequate and risky. This is when the concept of companies emerged, and private companies form of business is the oldest example of it.

Formation of Private Limited Company

Minimum 2 and maximum of 200 members can come together to form a private company by submitting an application to that effect to the Registrar of Companies along with a subscribed copy of their Memorandum of Association and other required documents after payment of prescribed fees.

The Memorandum must state the name of the company (which should include the words “Private Limited”), the address of its registered office, its objects and purposes, and extent of liability of its members. It must also mention the details of subscribers to the Memorandum.

Apart from this, the Companies Act has also prescribed certain other compliances, such as requirements relating to names of private companies, their Articles of Association, details of members, transferability of shares, etc.


For becoming a director in a company, no professional or educational qualification is required. But one needs to check their employment policy (if in employment) before becoming a director.
The incorporation is perpetually valid until it is closed by the directors themselves or the Government closes it (due to non-compliance).
Director Identification Number (DIN) is a unique identification number required for a person to become a director of a company. DIN is issued by ROC office (Ministry of Corporate Affairs). DIN once issued is valid for a lifetime.
Digital Signature Certificate (DSC) is a form of electronic signature. It is mandatory as all the forms to be submitted will require the DSC of the directors.
Name search should be done as per the following guidelines:
     a. It should not be identical with the name of the existing company.
     b. Name should be unique.
     c. The name should contain the object of the company.
     d. One should follow the name approval guidelines as provided by the Government.
If you do not have a permanent office, the address of your home can also be the registered office of the company.
Yes, you definitely can change the address of the company by paying a nominal amount of government fees.
Yes, for a small business, a private limited company is a better option as it provides them with credibility and an image.
Yes, NRI can incorporate a Private Limited Company in India. But provided, atleast one director is resident in India.
No, the whole process of incorporation is online. So, one need not be physically present while incorporation.
Yes, a private limited company can be converted into a public limited company, OPC (One Person Company), LLP (Limited Liability Partnership), etc.