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Private Limited Company in India is governed by the “The Companies act 2013”. The act doesn’t allow such companies to trade its shares in Public. As per the new provision of the act, the total number of members should be minimum of two and a maximum of 200. This is the most common form of incorporation in India due to the share allotment feature through investment.

The following are the salient features of a Private Limited Company. The following information should be considered while registering a private limited company in Delhi, Mumbai, Pune, Bangalore and other cities:

1. Number of Members: A Private Limited Company, as per the Companies Act 2013, should have a minimum of 2 members and a maximum of 200.
2. Paid up share capital: There is no minimum limit to the amount of Share Capital required for Incorporating a Private Limited Company. This has been omitted by Act 21 of 2015 amendment of the Companies Act, with effect from 29-5-2015.
3. Limited Liability: The Liability of the members and shareholders is only limited to the amount of shares/value of shares held by them. His personal assets are protected from being appropriated at the time of liquidation, repaying debts to the creditors.
4. Single share held by two or more: Where a single share is held by two or more persons, it will be considered as one.
5. Non-transferability of Shares: Shares of a Private Limited Company are non-transferable. This is to prevent large corporations like Public Limited Companies to take over small businesses.
6. Restrictions to trade its Shares in Public: A Private Limited Company cannot sell its shares to the general public. The only way to raise capital is through Financial institutions.
7. Invitation or acceptance of Deposits: The Companies act 1956 strictly restrict the Private Limited Company to invite or accept deposits other than its members, directors or their relatives.
8. Employees: Past or present employees working for the company cannot be considered as a member of the Company.
9. Separate Legal Entity: A Private Limited Company has a Separate Legal Entity and has all the rights, functions and obligations of that of Legal Person. For eg, a Private Limited Company can buy land, property, pay taxes, etc through its agents/employees/directors, etc.
10. Paid up Capital: A Private Limited Company should have a minimum paid up capital of Rs 100000, and can be increased to a particular amount as and when required.
11. Name Structure: After the Name approval by the MCA, the structure of the name is always in the form of Private Limited Company, i.e the name of the Company should always end with the name “Private Limited Company”.
12. Favorable for Investment: This is the feature which makes Private Limited Company most sought over form of Incorporation in India. There is a clear distinction between directors and shareholders and hence very suitable for equity/venture funding. Unlike any other form of Incorporation, Venture Capitalists, Seed Funders and Private Equity investors always prefer a Private Limited Company. In LLP there is only availability of Partnership, and no share allocation, and in OPC, there is only one person and no scope for share allocations.