A private limited company is a business entity offering limited owner liability. It is apt for a small number of shareholders and allows up to 200 members along with flexibility in shares and shareholdings.
One of the most highly recommended methods for starting a business in India is to establish a private limited company, which provides its shareholders with limited liability while imposing certain ownership restrictions. When it is LLP, the partners will manage it. On the other hand, a private limited company registration allows for directors and shareholders to be separate entities.
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In companies limited by shares, the liability of members is limited to the nominal share amount stated in the Memorandum of Association. Shareholders cannot be held liable for more than the capital invested in the company.
In a private limited company limited by guarantee, the liability of members is limited to the amount of guarantee specified in the Memorandum of Association. Therefore, members of a Private Limited Company Limited by Guarantee are not liable for an amount exceeding their guarantee stated in the Memorandum.
Furthermore, the members' guarantee in a Company Limited by Guarantee can only be invoked in the event of the company's winding up. The guarantee provided by the members cannot be called upon while the company is operating normally.
Unlimited companies are businesses with no limitations on the liability of their members. Each member is personally liable for the company's debts and liabilities to the full extent. Consequently, if an unlimited company is wound up, creditors have the right to recover the company's debts and liabilities from the shareholders.
Despite not offering limited liability protection to shareholders, an unlimited company is still recognised as a separate legal entity. As a result, the members of an unlimited company cannot be sued individually.
The MCA requires proper identity and address proof for private limited company registration in India. The following documents are the requirements for registering a company in India:
Note: Your registered office need not be a commercial space; it can be your residence too.
