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InterviewSolution
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What is a private limited company? State any eight privileges enjoyed by it. |
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Answer» Private Company means a company which by its articles of association. • Restricts the right of members to transfer its shares. • Limits the number of its members to fifty. In determining this number of 50 employee members and ex-employee members are not to be considered. • Prohibits any invitation to the public to subscribe to any shares in or the debentures of the company. If a private company contravenes any of the aforesaid three provisions, it ceases to be a private company and loses all the exemptions and privileges which private company is entitled. Privileges: • Limited liability, • The simple and easy formation, • Immediate commencement of business upon incorporation, • Liberal payment of remuneration and loans to directors without any restrictions, • Easier inter-corporate loans • Lesser disclosure requirements • Tremendous ease in operation • Two directors are enough • Two Shareholders are adequate • Need not declare a dividend |
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