A company is an artificial person created by law. It is an association of persons formed and registered by complying certain prescribed formalities. A company is registered under Companies act 1956. Companies are of two types- private and public. A company is private company if the articles of such company contain the following restrictions:
- The right to transfer the shares shall be restricted.
- The number of members shall be limited to 50.
- The company is prohibited for making any invitation to public to subscribe for any shares or debentures.
- The company is prohibited from inviting or accepting deposits other than its members or directors.
Every private company must have a paid up capital of Rupees 1lakh or such higher paid capital as may be prescribed by the Central Government. The minimum number of directors is two and maximum is as prescribed by article of association. A private limited company can be registered by making an application to the Registrar of Companies in place where the registered office shall situate. After registration of company, a private company can commence business right from the date of its incorporation.
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