What is a Private Company?

1.	What is a Private Company?
Answer» A private company is one which: (i) Has a minimum of 2 and a maximum of 200 members excluding its past and present employees. (ii) Restricts the right of its members to transfer shares. (iii) Prohibits an invitation to the public to subscribe for any shares in or debentures of the company, or accept any deposits from persons other than its directors, members or relatives. (iv) Has a minimum paid up capital of one lakh rupees (subject to change). (v) Uses the word ‘Pvt. Ltd.’ at the end of its name.

Answer»

A private company is one which:

(i) Has a minimum of 2 and a maximum of 200 members excluding its past and present employees.

(ii) Restricts the right of its members to transfer shares.

(iii) Prohibits an invitation to the public to subscribe for any shares in or debentures of the company, or accept any deposits from persons other than its directors, members or relatives.

(iv) Has a minimum paid up capital of one lakh rupees (subject to change).

(v) Uses the word ‘Pvt. Ltd.’ at the end of its name.

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