Who is Eligible for Pvt Ltd Company?
Setting up a private limited company (Pvt Ltd) is a popular choice among entrepreneurs due to its numerous advantages. However, not everyone can form such a company. In this article, we will explore the eligibility criteria for establishing a Pvt Ltd company, ensuring you have a clear understanding of the requirements.
Eligibility Criteria for Pvt Ltd Company
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Minimum Number of Directors: To form a Pvt Ltd company, a minimum of two directors is required. These directors can be individuals, and in some cases, a corporate entity can also be appointed as a director.
- Shareholders: A Pvt Ltd company must have at least two shareholders. A shareholder can be a person or a corporate entity. It is important to note that one person can hold multiple shares.
- Resident Director: At least one director of the Pvt Ltd company must be a resident of India. A resident director is an individual who has stayed in India for at least 182 days in the previous calendar year.
- Share Capital: The company must have an authorized share capital, which represents the maximum value of shares that the company can issue. While there is no minimum requirement for authorized share capital, it is common for companies to have an initial authorized share capital of Rs. 1 lakh or more.
- DIN and DSC: Directors of the Pvt Ltd company are required to obtain a Director Identification Number (DIN) and a Digital Signature Certificate (DSC) from the Ministry of Corporate Affairs (MCA).
- Name Approval: Choosing a unique and acceptable name for the Pvt Ltd company is crucial. The proposed name must not resemble any existing company or violate any guidelines issued by the MCA.
- Compliance with Legal Requirements: It is essential to comply with all legal requirements and regulations of the Companies Act, 2013, and other applicable laws, such as tax laws and labor laws.
Forming a Pvt Ltd company comes with various benefits, but it's important to meet the eligibility criteria before proceeding. By understanding the key requirements, such as the minimum number of directors, shareholders, and resident director obligations, you can ensure a smooth and successful establishment of your Pvt Ltd company.