Question

What is meant by a Private Company?

Answer 1

A private limited company is a type of company that is formed with a minimum of two shareholders and two directors, the minimum requirement with respect to authorized or paid-up capital of Rs. 1,00,000 has been omitted by the Companies (Amendment) Act, 2015 w.e.f. 29^th of May, 2015.

Another crucial condition of a private limited company is that it by its articles of association restricts the right to transfer its shares and also prohibits any invitation to the public to subscribe for any securities of the company.