CONDITIONS

1. It should have a minimum paid-up share capital of Rs. 1 Lakh or more.

2. Restricts the right of the transfer of its share;

3. The number of members are limited to 50 which does not include:

a) members who are employees of the company; and

b) members who are ex-employees of the company and were members while in such employment and who have continued to be members after ceasing  to be employees

4. Prohibits any invitation to the general public to subscribe for any shares or debentures of the company

5. Prohibits any invitation or acceptance of deposits from persons other than its members, directors or their relatives.

Moreover, the minimum number of members in a private company is two, and such a company must have the words “Private Limited” as the last part of its name. 

STEPS TO SET UP A PRIVATE LIMITED COMPANY

Company registration in India is regulated by the Companies Act, 1956 and is administered by the Ministry of Corporate Affairs.

When you chose to register a company in India, an application for name availability has to be filed with Ministry of Corporate Affairs. It also involves obtaining Directors Identification Number and Digital Signatures. Once, name of the proposed company is approved, company registration documents such as memorandum and articles of association has to be prepared and filed with respective Registrar of Companies (ROC) for registration. Upon scrutiny of documents, the ROC registers the Company and issues the Certificate of Incorporation.