In practice in Kurukshetra since 1984ICAI Firm Reg. No. 018813N

Private Limited Company

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Limited liability, separate legal entity, built to raise capital.

Law
Companies Act, 2013
Registered with
Registrar of Companies (Ministry of Corporate Affairs)
Members
Private company: 2 to 200 members and at least 2 directors. One Person Company: 1 member and 1 director
Liability
Limited to the unpaid amount on the shares held
Income tax
22% under the concessional regime (otherwise 25% or 30%), plus surcharge and cess. Dividends are taxed again in the shareholders' hands

01 About the Private Limited Company / One Person Company

A company is a separate legal person, distinct from the people who own and run it. It can own property, borrow, enter into contracts and sue in its own name, and it continues even when shareholders or directors change.

Most growing businesses choose a private limited company. A One Person Company (OPC) gives a single founder the same limited liability with one shareholder and one director.

02 Benefits

  • Shareholders' personal assets are protected: liability is limited to the unpaid share capital.
  • Perpetual succession: the company is not affected by the death, exit or change of shareholders.
  • Easiest structure for raising money: equity investors, venture funds and most lenders prefer companies, and shares can be issued to new investors.
  • Credibility with banks, large customers, government tenders and foreign partners.
  • Employee stock options (ESOPs) can be offered to retain key people.
  • Concessional corporate tax rate of 22% (plus surcharge and cess) for companies that opt for it.

03 Must understand before creating

  • Highest compliance of all structures: a statutory audit every year whatever the turnover, annual returns (AOC-4 and MGT-7/7A), board meetings, statutory registers and KYC of every director.
  • Late filing attracts additional fees of ₹100 per day per form, and repeated defaults can disqualify directors.
  • Profits reach owners as salary or dividend; dividends are taxed again in the shareholders' hands.
  • Money cannot be drawn freely from the company: loans to directors and related-party transactions are restricted.
  • Transfer of shares in a private company is restricted by its articles.
  • Closing a company (strike-off or winding up) takes time and needs all filings to be up to date.
  • Ongoing professional costs for accounts, audit and secretarial compliance.

Usually needed to register: Digital signatures and DIN for directors, name approval, registered office proof, and the Memorandum and Articles of Association.

04 Send your requirement

Tell us about the business you plan to set up. Your details go to our office by email and we will get back to you.

Please do not send PAN, Aadhaar, passwords or documents through this form.

General information on the law as it stands for Tax Year 2026-27, not professional advice. Rates, limits and procedures change; please confirm before acting.

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