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Private Limited

Types of Private Limited Companies in India

A company which is carried out for small business. To begin a private limited company, two or more members are  needed and the limitation set is upto 200 members.

A company which is carried out for small business. To begin a private limited company, two or more members are needed and the limitation set is up to 200 members. Let’s see the types of Private Limited Companies in India

Listed below are a few examples  of a private limited company

  • Sap Labs India Private Limited
  • LifeStyle International Private Limited
  • Paypal Payments Private Limited
  • Netapp India Private Limited
  • DHL Express (India) Private Limited

Let’s discuss private limited companies before moving on to their types. We have provided a clear description of each person’s role. This will help you to understand and identify the differences between each other.

For instance, One or more individuals who own a company are known as ‘members’. Whereas, the members of limited by shares are called Shareholders and limited by guarantee are called Guarantors. Liability refers to legal responsibility.

Hope, this will help you to understand your role in Private limited company.

Different Types of Private Limited Company

Private company Limited by shares

In this company, the capital is divided into small parts known as shares. These shares are introduced to Shareholders. Whereas, Private company limited by shares  whose Shareholders have limited liability. Unlike public limited companies, A Pvt Ltd company shares can’t be given to the public.

In simple words, “Limited by shares” indicates that the liability of the members of limited by share company ( Shareholders)to creditors  of the private limited company is restricted to the capital amount initially  contributed. For instance, the nominal value and any installment paid in return for the issuance of the shares by the Private limited Company. According to the limited by shares regime, shareholder’s personal assets are not at risk in case of the company’s insolvency or loss, but any money contributed to the company will be lost.

Private Company Limited By Guarantee

In this Private Limited Company by guarantee, their capitals are not divided in the forms of share but introduced to members in terms of guaranteed nature.

Limited by guarantee, however, does not include shareholders like a limited by share company. But they have  members who are guarantors of the company’s  liability. In case of a company’s debts or winding up, each member is allotted a certain amount mentioned in the articles.

Unlimited Company

This type of company has unlimited liability for its members. It also denotes that their personal assets are at risk. which means, during companies insolvency, individual members’ personal asset can be used to pay the company’s liabilities and debts. Even though the existence of such a thing does not exist, it does not mean it cannot exist.

From the above types of private company, ROC has given incorporation certificates to Limited by share companies. Which also helps understand that Limited by share company is more beneficial for business purposes. Limited by share company provides its members a maximum safeguard and this type of company is widely acceptable.

We tried our best to give you a clear and quick description about each type of private limited company. We love to help our readers to get the correct information about the subject they are looking for. To have all this managed perfectly for you, reach out to the experts at Vakilsearch.

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