What is private limited company.

1.	What is private limited company.
Answer» As defined by the Section 3 (1) (iii) of Companies Act 1956, private limited company is ; defined by the following characteristics: • It restricts the right to transfer its shares. • There must be at least two and a maximum of 50 members (excluding current and former employees) to form a private company. • It cannot invite application from the general public to subscribe its shares, or debentures. • It cannot invite or accept deposits from persons other than its members, Directors and their relatives.

Answer»

As defined by the Section 3 (1) (iii) of Companies Act 1956, private limited company is ; defined by the following characteristics:

• It restricts the right to transfer its shares.

• There must be at least two and a maximum of 50 members (excluding current and former employees) to form a private company.

• It cannot invite application from the general public to subscribe its shares, or debentures.

• It cannot invite or accept deposits from persons other than its members, Directors and their relatives.

Discussion