Introduction
A privately-owned company which we name “Private Limited Company,” is a company that may issue shares to their shareholder, but does not trade in public. As per Section 2 (68) of the Companies Act, 2013, a private limited company are those whole articles (AOA) that restricts the right to transfer the shares and avoid the public in the market from subscribing to it.
Private Limited Companies are further classified into three different types according to the liability. Here are the types of private limited companies.
Types
- Company Limited by Shares
A private limited company limited by shares is a company having the limited liability of its shareholders up to the paid-up capital share capital or unpaid amount.
- Company Limited by Guarantee
A private limited company limited by guarantee is a company where the members gives their guarantee for being liable. It means being the shareholder cannot be held liable for more than his guarantee to the company. The guarantee given by the member is allowed to be taken only at the time of winding up of the company.
- Unlimited Companies
A private unlimited company is a company where the liability of the members of such companies is unlimited. In this type of company, members’ personal assets can be utilized for paying off the company’s debt and liabilities. Having unlimited liability of the members, this type of company is usually less preferred.
Conclusion
All in all, having more and numerous benefits, a private limited company is the one that provides with maximum benefits and privileges as compared to other types of companies. That is the prime reason why a private limited company is more preferred than other remaining companies. And among these three types of private companies, the most incorporated company is Company limited by Shares. As it gives maximum protection to its members.
So, hope you have now made up your mind to start with your own private limited company. Think less, and give us a call to help you with the private limited company registration process. We, at EAdvisors are there to help you in every possible manner.
