Basic Concept of Private Limited Company.

[richardm1964]

To start a business it is always advisable to start a private company. I know setting up a private Limited Company (PLC) is easy.But what are the basic concept of a private limited company and it's jurisdictions?

 

[mneilson]

A Private Limited Company can be defined as a Company limited by shares in which there can be maximum 50 shareholders. The Basic concepts are:


No invitation can be made to the public for subscription of shares or debentures.


It can't make or accept deposits from Public and there are restriction on the transfer of shares.


The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him.


However, the liability of a Director / Manager of such a Company can at times be unlimited. The minimum number of shareholders is 2.