Private Limited companies
By – Kajol Vaswani
Business Project
Private Limited Companies
A private limited company is a voluntary association of not less than two and not more than fifty members, whose liability is limited, the transfer of whose shares is limited to its members and who is not allowed to invite the general public to subscribe to its shares or debentures.
Ownership Control
Ownership of a company rests with the shareholders. One share equals one vote, which implies an equal share in the profit as well as an equal say in the control of the company.
In private limited companies the shareholders are usually:
Family members
Existing business partners
Employees
Sources of Finance: Most start-ups finance their business from their personal savings of shareholders. Other internal sources of finance include loans and grants from family and friends. Two documents must be produced and submitted to the appropriate authorities before they can commence the trading.
Firstly the Memorandum Of Association, it gives the company's name, names of its members (shareholders) and number of shares held by them, and location of its registered office. It also states the company's objectives, amount of authorized share capital, whether liability of its members is limited by shares or by guaranty, and what type of contracts the company is allowed to enter into.
Secondly the Articles Of Association, it is a document that specifies the regulations for a company's operations. The articles of association define the company's purpose and lays out how tasks are to be accomplished within the organization, including the process for appointing directors and how financial records will be handled.
Once the authorities are satisfied with the above documents and an application fee has been paid, a Certificate Of Incorporation is issued to the company. This license recognizes the business as a separate legal entity from its owners and allows the business to start trading as a
Business Project
Private Limited Companies
A private limited company is a voluntary association of not less than two and not more than fifty members, whose liability is limited, the transfer of whose shares is limited to its members and who is not allowed to invite the general public to subscribe to its shares or debentures.
Ownership Control
Ownership of a company rests with the shareholders. One share equals one vote, which implies an equal share in the profit as well as an equal say in the control of the company.
In private limited companies the shareholders are usually:
Family members
Existing business partners
Employees
Sources of Finance: Most start-ups finance their business from their personal savings of shareholders. Other internal sources of finance include loans and grants from family and friends. Two documents must be produced and submitted to the appropriate authorities before they can commence the trading.
Firstly the Memorandum Of Association, it gives the company's name, names of its members (shareholders) and number of shares held by them, and location of its registered office. It also states the company's objectives, amount of authorized share capital, whether liability of its members is limited by shares or by guaranty, and what type of contracts the company is allowed to enter into.
Secondly the Articles Of Association, it is a document that specifies the regulations for a company's operations. The articles of association define the company's purpose and lays out how tasks are to be accomplished within the organization, including the process for appointing directors and how financial records will be handled.
Once the authorities are satisfied with the above documents and an application fee has been paid, a Certificate Of Incorporation is issued to the company. This license recognizes the business as a separate legal entity from its owners and allows the business to start trading as a