A minimum of two shareholders is required for legal registration of a Pvt Ltd company. A total of two hundred shareholders are acceptable in any Private Limited Company but not more than that. The company lies somewhere between a partnership firm and a widely owned Public company.
The owners of a private limited company are known as shareholders . Shareholders have to be invited by the business before they can purchase a share of the business. A share is a portion or percentage of a company.
All companies must have at least one share, and thus, at least one shareholder, in order to be validly incorporated as a private company.
In a Private Limited Company, the shareholders are the owners and directors are the managers. However, not all directors’ own shares, nor it is workable for every shareholder to run the company. Hence delegation of work among members and owners is important. So the directors are appointed to manage the company.
Private limited company
There must be a minimum of 2 shareholders and a maximum of 200.
What you have to do:
- go to http://mca.gov.in/MCA21/index.html.
- Create an account.
- Go to ‘View Public Documents’
- Enter the name of the company you’re looking for.
- Check in the list whether Form 20B (for filing Annual Return) is available for that company.
- If it is, then make the payment and download this Form.
Shareholders of a company are of two types – common and preferred shareholder. As their name suggests, they are the owners of a company’s common stocks.
Many experts suggest starting with 10,000, but companies can authorize as little as one share. While 10,000 may seem conservative, owners can file for more authorized stocks at a later time. Typically, business owners should choose a number that includes the stocks being issued and some for reservation.
A private limited company can have a minimum of 1 shareholder and a maximum of 50 shareholders.
How many directors are in a private company?
Section 149(1) of the Companies Act, 2013 requires that every company shall have a minimum number of 3 directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company.
To clarify, private companies can only have fifty (50), non-employee shareholders. Importantly, this means that your company can have more than fifty (50) shareholders, if they are employees. Additionally, the law does not limit private companies to fifty (50) shares.
Types of Shareholders:
- Equity Shareholder:
- Preference Shareholder:
- Debenture holders:
Minimum 7 shareholders are required to form a public limited company. Minimum of 3 directors is required to form a public limited company.
Shareholders and directors have two completely different roles in a company. The shareholders (also called members) own the company by owning its shares and the directors manage it. Unless the articles say so (and most do not) a director does not need to be a shareholder and a shareholder has no right to be a director.