A substantial number of entrepreneurs prefer to form a private company because of the following important privileges: 

(1) Only two members are required to form a private company. 

(2) Only two directors are required to constitute the quorum to validate the proceedings of the meetings. 

(3) Such a company is not required to file a prospectus or a statement in lieu of prospectus with the Registrar of Companies. 

(4) It can commence its business immediately after incorporation. 

(5) Holding of a statutory meeting or filing of a statutory report is required by a private company. 

(6) A non-member cannot inspect the copies of the profit and loss A/c filed with the Registrar. 

(7) Limit on payment of maximum managerial remuneration does not apply to a private company. 8) Restrictions on appointment and reappointment of managing director do not apply. 

(9) Maintaining an index of members is not required by a private company. 

(10) Directors of the private company need not have qualification shares.