Private limited company registration is crucial. If anyone needs to start a business in India, the first and foremost step is to enact the Acts Act, 2013. This is to increase the legal presence of the business in India by registering the business with the consent of the applicable provisions of. The business needs to be register before starting any business. The initial step is to choose what type of business anyone wants to define for the business among the different types of business structures available in India.
Registration of a private limit company is the best known business structure in India. Company registration in India is online and registration of a private limited company requires at least two shareholders and two directors.
Private Limited Company Registration in India is the standard for starting a new business. This structure is create under an organize business sector govern by specific laws and provisions. An Indian company is affiliate and register under the Indian Companies Act, 2013, which has appointed the Ministry of Corporate Affairs as an oversight body.
A private limited company registration has many characteristics that cover issues such as borrowing money, paying pensions, reporting business accounts, selling business or raising capital.
Benefits of private limited company
Ownership:
In the case of a public company, proprietary shares can be sell to the public on the open market. However, in the case of a private limit company the shares of the company can be sold or transfer by the owner at his discretion. The shares of a private limited company registration in Chennai established, managed and owned by private investors. Shares of a private limited company cannot be sell in the open market. Thus, a private limit company is own by a small number of shareholders which enables less complexity and confusion in decision making and management.
Minimum number of shareholders:
In case of a private limited company, at least 2 shareholders are require. However, in the case of a public limit company, at least 7 shareholders are require.
Legal compliance:
Legal compliance is an important factor after creating a company. If you are planning to create a public limit company, you should be prepare to follow a long list of compliance after creating a public limited company. However, in the case of a private limited company, legal compliance is low.
Management and decision making:
In the case of a private limited company registration in Madurai the small number of shareholders makes it easy to make such a decision. However, in the case of a public limited company, management and decision making is difficult, as a greater number of shares are consult in case of decision making.
Minimum share capital:
In the case of a public limited company, the required investment is higher. A public company has a minimum share capital of 500,000. However, in the case of a private limited company registration in Salem, the minimum share capital requirement is Rs. 1, 00,000. Also, note that there is no such minimum requirement compulsion.
Types of shares in private limited company
Equity shares:
The most common type of share, all equities are consider equal. So if you have equity in a company, your shares include all voting and other rights. U.S. In, it is call as common stock.
Share the equity with the difference voting rights:
Such shares are usually issue to the founder or CEO so that they have more control over the day-to-day affairs of the company. Google and Facebook are two companies know to issue shares that give certain voting rights to certain sections of investors. However, in India, for the issuance such shares, one must show that someone is capable of distributing dividends for three years.
Preferred shares:
This, as stated, is preferential. The advantage of having preferential shares is that, in case of liquidation of the company, after all the debts of the company have been settle, the preferential shareholders will be paid first. Payments will be make to ordinary shareholders once this is done. These shareholders are also frequently pay by shareholders separately from different equity shareholders. However, preference shares do not have the right to vote.
Sweat equity
Sweat equity is put into the project by unpay labor employees and cash-strap entrepreneurs. Homeowners and real estate investors can use sweat equity to do repairs and maintenance instead of paying for conventional labor. In startups with cash, owners and employees typically accept salaries that are below their market value in exchange for a share of the company.
ESOP
A common problem that most entrepreneurs face is how to motivate their employees in a mutually beneficial way. The most practical solution to this is the Employee Stock Options Plan (ESOP), which is use equally by small and large enterprises. It keeps your qualified employees motivated for growth in the company. It makes sure you don’t lose them for several years. Companies offer stock ownership to their employees in ESOP. This is often done without any apparent expense but instead of the work they do. Shares are allot to employees but are allow only after a pre-determine period. It cannot be give to freelancers, promoters, consultants.
Conclusion
One of the major advantages of this structure is the tax efficiency, the private limited company registration that it builds on customers and consumers. Working under LTD status often improves your credibility and can also make a more professional impression, which can lead to more business and higher profits in the long run.
Many businesses prefer to operate as a private limited company. A limited company is a legal entity in itself, as opposed to working as a sole trader or being in a partnership. It has a variety of structure and more complex requirements such as different tax, legal obligations. The biggest difference between going it alone as a sole proprietor and incorporating a limited company is that the limited company has a special status in the eyes of the law. Unlike a publicly limit company on a stock exchange, where shares are traded, a private limited company registration in Bangalore does not trade shares in public and is limited to a maximum of 50 shareholders.