private limited company is a company which is privately held for small businesses. The liability of the members of a Private Limited Company is limited to the amount of shares respectively held by them.Shares of Private Limited Company cannot be publically traded. 

Characteristics of PVT Ltd Company

Members– To start a company, a minimum number of 2 members are required and a maximum number of 200 members as per the provisions of the Companies Act, 2013.

Limited Liability– The liability of each member or shareholders is limited. It means that if a company faces loss under any circumstances then its shareholders are liable to sell their own assets for payment. The personal, individual assets of the shareholders are not at risk. 

A number of directors– When it comes to directors a private company needs to have only two directors. With the existence of 2 directors, a private company can come into operations.

Paid-up capital– It must have a minimum paid-up capital of Rs 1 lakh or such higher amount which may be prescribed from time to time.

Benefits of PVT Ltd Company

Solid Decision Making

Shares of PVT Ltd companies are owned by founders, management or at max a group of private investors. Shares here are not sold in the open market. Thus, less number of shareholders means less complexity and confusion in decision making and management.

Minimum number of shareholders

A Pvt Ltd company can be incorporated with minimum of just 2 Directors.

Separate Legal entity

Contrary to a proprietorship firm where there is no legal difference between the business and the owner, PVT Ltd company has a separate legal existence. In short, liability of shareholders of a PVT Ltd firm is limited to the extent of their shareholding. Their personal assets are not acquired to repay the debts or losses of the company.


The regulatory norms for PVT Ltd firms are more relaxed as compared to public Ltd companies. Confidential information such as executive compensation, legal settlements, and other essential information can be kept more confidential in a PVT Ltd company.


Documents Required

Pan Card (PAN Card of shareholders and Directors)

Identity Proof (Aadhar card and Voter ID/ Passport/ Driving License of Shareholders and Directors)

Director’s address proof (Latest Telephone Bill /Electricity Bill/ Bank Account Statement of Shareholders and Directors.)

Photograph (Latest Passport size photograph of Shareholders and Directors)

Business address proof (Latest Electricity Bill/ Telephone Bill of the registered office address)

NOC from owner (No Objection Certificate to be obtained from the owner(s) of registered office)

Rent Agreement (Rent Agreement of the registered office should be provided if any)