What do you mean by private company - tradecareer

            What do you mean by private company

 PRIVATE COMPANY 

A company, which has a minimum paid-up share capital as may be prescribed and which by its articles provides the following: 

i. Restricts the right to transfer its shares; 

ii. Except in the case of OPC, limits the number of its members to 200 excluding present and past employees who continue to be the members of the company (here joint members shall be counted as one); and 

iii. Prohibits any invitation to the public to subscribe for any securities of the company. 

There should be at least 2 persons to form a private company. A private company should have at least 2 directors. The name of a private limited company must end with the words "Private Limited". 

                                                                 


Privileges of a Private Limited Company 

1. Financial assistance can be given to its employees for purchase of or subscribing to its own shares or shares in its holding company.

2. Need not prepare a report on the AGM.

3. Need not prepare a statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors.

4. Need not appoint Independent directors on its Board.

5. A proportion of directors need not retire every year.

6. Additional grounds for disqualification for appointment as a director may be specified by the company in its AOA.

                                                                    


7. Restrictive provisions regarding total no. of directorships which a person may hold in a public company do not include directorships held in a private company which is neither a holding nor subsidiary company of a public company.

8. Additional grounds for vacation of office of a director may be provided in the AOA.

9. The provisions relating to contract of employment with MD or WTD does not apply to a private company.

10. Total managerial remuneration payable by a private company, to its directors, including MD and WTD, and its manager in respect of any financial year may exceed 11% of the net profits.

11. Provision relating to right issue open for minimum of 15 days and maximum of 30 days and also the provision that the letter of offer has to be sent at least 3 days before opening of the offer shall not apply in case of private company, provided at least 90% of the members agree in writing for a shorter period.


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