What is a private limited company ?
By law, a corporation is a separate entity that has its own rights and responsibilities. In forming a corporation, potential shareholders offer money and/or property in exchange for stock. ADVANTAGES OF THE CORPORATION * Limitations of the stockholder's liability to a fixed amount of investment. However, do not confuse corporate liability with appropriate liability insurance considerations. * Ownership is readily transferable. * Separate legal existence. * Stability and relative permanence of existence. In the case of illness, death, or other cause for loss of a principal officer or owner, the corporation continues to exist and do business. * Relative ease of securing capital in large amounts and from many investors. Capital may be acquired through the issuance of various stocks and long term bonds. There is relative ease in securing long term financing from lending institutions by taking advantage of corporate assets and often personal assets of stockholders and principals of guarantors. * Delegated authority. Centralized control is secured when owners delegate authority to hired managers, although they are often one and the same. * The ability of the corporation to draw on the expertise and skills of more than one individual. DISADVANTAGES OF THE CORPORATION * Activities limited by the charter and by various laws. However, some states do allow very broad charters. * Manipulation. Minority stockholders are sometimes exploited. * Extensive government regulations and required local, state, and federal reports. * Less incentive if manager does not share in profits. * Expense of forming a corporation. * Double tax - income tax on corporate net income and on individual salary and dividends.
In a Pvt. Ltd. company of 3 directors with shares 34%,33% & 33%, if one of the director has invested less than the other two directors, will he have an equal claim over profits in the future along with the other two directors who have invested more? If so, what is the procedure to take shares from the one who is investing less?
First of all let me guide you through the concept of Company.Company is the separate legal entity distinct from its members and has a perpetual succession. Now a Company can be of 2 types:Private Limited Company - Company in which the shares can only be held by promoters, their friends & relatives but not public.Public Limited Company - Company in which public can be invited to hold the shares of company and therefore become the part owner of company.Now share holder in company means the person who has invested some amount in the total capital of company, thereby becoming the part owner (in other words, shareholder) of the company.It is quit clear from above that shareholder i.e member of company is different from director of company. The person who is director of company may be the shareholder or may not in the company.Now coming to your first question, you have mentioned that company has three directors and they are also the shareholders of company holding 34%, 33% & 33% of total share capital of company respectively.Here I would like to clarify that directors in their capacity are not entitled to the profits of company. They are only entitled to get the directorial/managerial remuneration from company.Further as quoted by you, they are also the shareholders of company then in the capacity of shareholders they get some reward for the money invested by them in capital of company, which they get on the basis of number of shares held by them. It is so because the company calculates the EPS (earning per share) and distributes the amount by multiplying EPS with number of shares held by each member.Heading towards another question,Company cannot arbitrarily take back any shares from it’s members. The Board of Directors of company has to follow the procedure as enshrined in the Companies Act for doing so.One of the best resort I can advise you taking into account the private limited company is that you can advise the Board for doing Buyback of shares, which means taking back shares from members against payment of fair value of shares to them. Again this need to be complied accordingly as provided in aforementioned Act.I hope this serves your purpose and if so, upvote the answer.If you have any more questions, I am here to answer.
Can one register a pvt. ltd. company without the help of CA or any professional?
You cannot directly register a startup company through registrar of companies (ROC) by yourself. To Register a Startup company in India you’ll need to take help of professional & licensed company registration service providers like us.We will get your company registered as Pvt. Ltd. in less than 10 days, with all inclusive price of Rs. 13,700/-.Minimum Requirements for Private Limited Company RegistrationMinimum 2 Directors (The directors and shareholders can be same person)Minimum 2 ShareholdersNo Minimum Capital RequiredDocuments Required For Private Limited Company Registration:Colour PP PhotographPAN Card – Self AttestedIdentity Proof – Any One Self Attested(Driving License / Passport / Aadhar Card / Voter ID Card)Address Proof – Any One Self Attested(Latest Bank Statement / Electricity Bill / Telephone Bill / Mobile bill).The Proof or things that you’ll receive after Registration Includes:2-Digital Signature Certificate (DSC)2-Director Identification Number (DIN)Company Name Approval by MinistryMemorandum of Association (MoA) &Articles of Association (AoA)Registration CertificatePermanent Account Number (PAN)Tax Account Number (TAN).For more details:Email us: info@hgcorporates.comCall on: 82608–82609
Am i personally liable for my ltd companies debt if i strike it off? PLEASE HELP!!?
looks like you are gonna need a lawyer and an accountant cos you could be in deep sh//t (virgin media could be the least of your problems) (1) "you" cannot write any "debt" off- you can only set company expenses against company profits 2) "it would come off my tax rather than my own money" no it dont- it comes of the tax on the profits the company makes You can set company expenses against that profit to lower the taxes the "company" pays (those expenses include money the company pays to you for the work you did FOR the company) 3) looks like the company aint being making any profit - so there is nothing to set those expenses against (my betting is- you have taken all the money paid to the company (for the work you did) as YOUR income , while ignoring expenses the company should have paid (such as virgin media)) Your problem is - if you operate a company that continues to accumulates debt that it has no way of paying THATS fraud (by you as company director) (it cant pay them cos you have been taking all company income as your "pay") 4) If you took money from the company as pay then you should have paid NI contributions and paid tax on it as an employee ,and declared this payment in the company books Only other way you could get the money is direct from the company AFTER the company had paid its debts (ie - the "distributions of profits of the company") THEN filled out a self assessment form declaring this as income (from company dividend) . AND paid NI as a company director My betting is- you aint done either of these. Only way you gonna find out how deep the ****, is to do what "girlie electrics" says , but my betting is - its gonna take the rest of this year to sort it out (you should have subscribed to "quickbooks" - For a small monthly fee they would have done ALL your bookkeeping, taxes etc for you As self employed it would have only cost you at most £6/month)
Which one is best, a proprietor or a private limited company?
Sole Proprietorship: – Run by a single person and is generally employed in traditional businesses. More of a one-man-show which is not scalable beyond a certain point. Additionally, there is no statute or law which governs its registration and functioning.Private Limited Company: – Formed by at least two shareholders and directors, it has Equity shares instead of a Profit sharing ratio. The word 'Private' denotes that the pubic cannot be invited to purchase its Shares and the 'Limited' denotes that the Liability of the Shareholders and Directors is Limited. It is a compliance-heavy entity.Please refer to the following tabulation:Sole Proprietorship has no formal registration process, it has minimal or no compliance requirements and works out to be more tax friendly than a Private Limited. However, if you are seeking to fulfill the above mentioned points^, you should not hesitate to form a Pvt. Ltd.Also, a Sole Proprietorship projects an impression of a one-man show. It lacks credibility and big corporations sometimes prefer working with Pvt. Ltd. Companies or LLP’s over Proprietorship Firms.To conclude, a Proprietorship is optimal for small-medium scale businesses.For large scale businesses (wherein there are partners and a team employed) it is preferable to create a Separate Legal Entity that has Limited Liability and Perpetual Succession.Feel free to comment here or contact us on + 91 79778–63125 / info@businessguru.co.in if you still have doubts.
How can I register a Pvt. Ltd company without an office all by myself?
I will divide the answer in following Three Parts:Regading Office AddressRegistration on ownOnce you satisfy yourself with above two, you may proceed with next Part:Registration ProcedureOffice Address:To carry on any business activity, a place of communication is must and requisite part. Hence in case of Private Company Registration.You shall provide the address, which will be known as “Registered Office Address” of the company. The same will be available on website of MCA as under Master Data of company as public records.However, if one do not have any commercial place of business, as in most cases of start ups or service providers and online dealers, the Company can also be registered by providing a Residential Address [1]or Virtual Office Address.Registration without help of Professional:Companies Act expressly provides requirement of Practising Professional (Company Secretary or Chartered Accountant) for registration of company, which helps the said structure being more credible in market compared most other organisations.Also, the role and involvement of professional is of vital importance as a layman or a simple Businessman may not be aware about the processes to be followed. Criminal Liability may arise on failure to comply or false disclosures during registration process.Now, to register a company, a person shall first visit the professional.Procedure of Company Registration in brief:Procure Digital Signature Certificate (DSC) of directors and shareholdersApplication of Director Indentification Number (DIN) of Directors.Application for Name Approval.Gather documents and drafting of MoA & AoA.Filing of Application of Incorporation. (registration)Opening Current Account in preferred bank.Once the Certificate of Incorporation (COI) is received after application (step 5), the company comes into existence and can carry on business in its own name. PAN and Date of incorporation shall be mentioned in the certificate itself.Read here, the incorporation procedure in detail.[2]Read all you need to know for company incorporation.[3]Please let me know about your queries through comment!Happy to help!:)Footnotes[1] Can I use my Residential place as Registered Office Address?[2] Procedure for Incorporation of a Private Limited Company[3] All you need to know for registering a company
How can one transfer the shares of a Private Limited company?
Hi,First of all, pl check the Articles of Association (AoA) of your company. There may be restrictions on the transfer.For transfer of your brother’s shares - If any shareholder has deceased, his shares go to the nominees (if any) as per the company records or to his legal hier (spouse, children or parents). You need to follow the process of transmission of shares.For the transfer of shares of other shareholders - they can transfer to your father. You need to follow the process of transfer of shares. But like I said before that you need to check the AoA.Pl remember that at all times, you need to have minimum 2 shareholders and minimum two directors.DIN is required only when you intend to become a director.I am a Company secretary in practice and can help you with the process of transfer and transmission along with the required paper work.If you need help, you can contact me here - Contact
Is LIC Housing Finance limited a PSU ltd. or a private ltd. company, tell me ?
Its a Private Ltd Company... However, the Majority Shareholder (41% owned by LIC) -- And LIC is Government owned company... So its anybody guess, that is Private Ltd company , however powered by a PSU company..
Why is cadbury a public limited company?
u wont get A* by asking others to answer your questions, U have to find out by urself, or ur study group. Wonder if this question comes in exams but with a little twist in it, ure screwed