Incorporation of Private/ Public Limited Company:
Benefits of Incorporation of Company:
- Company is an entrepreneur artificial body with perpetual succession.
- It is independent of its directors and Shareholders.
- The liabilities of shareholders of the company are limited to the extent of their Shareholdings in the company.
- The Board of Directors have full control over the business of the Company even without 100% (but over 50%) shareholding. Particularly beneficial to projects where large capital investment is required. Also beneficial for non-residents & foreign investors owned projects where 100% shareholding is not permissible due to Sectoral Cap.
Requisites for incorporation of Company:
- The minimum no. of Shareholders in private limited Company is two and seven for public limited company.
- The maximum no. of shareholders in the Private limited company cannot exceed 200. There is no limit on the maximum no. of shareholders in public limited company.
- The minimum no. of directors in a private limited company are two and for a public limited company are three.
- The maximum no. of directors can be fifteen.
- There is no minimum paid up Capital requirements (Previously it was Rs. One Lac.)
- The Company must have a Registered Official.
- The Company must have its own Memorandum and Articles of Association which is the Charter of the Company.
- The Articles of Association defines the internal regulation of the company and its management.
- Every director of the company, whether Indian and foreigner must get the Director Identification No. (DIN) and Digital Signature Certificate (DSC). DSC is digital equivalent of normal written signature.
- The address of the registered office premises can be commercial/ industrial/ residential where the communication can be received.
- One of the directors must stay in India for at least 182 days during the financial year.