Private Limited Company
KAPG & Associates

A Private Limited Company (Pvt Ltd) is a type of business entity that operates privately, often chosen by small to medium-sized businesses. This structure is ideal for businesses aiming to balance control, liability protection, and growth flexibility without going public. Here are some key features of a Pvt Ltd company:

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  1. Limited Liability: Shareholders liabilities are limited to their share capital in the company. Personal assets are protected if the company faces financial issues.
  2. Separate Legal Entity: A Pvt Ltd company has its own legal identity, separate from its owners, allowing it to own property, enter contracts, and be sued in its own name.
  3. Number of Shareholders: Pvt Ltd companies typically require a minimum of two and a maximum of 200 shareholders, which encourages a private structure and helps maintain control.
  4. Transfer of Shares: Shares can be transferred among existing shareholders, but transfers to outsiders may require approval from other shareholders or the board, maintaining privacy and control.
  5. Perpetual Succession: The company continues to exist regardless of changes in ownership, such as the death or resignation of shareholders or directors.
  6. Restrictions on Public Trading: Unlike public companies, Pvt Ltd companies cannot freely trade shares on the stock exchange, keeping ownership within a private group.
  7. Compliance Requirements: Private Limited Companies have specific compliance requirements, including annual filings, board meetings, and other regulatory requirements, making them more structured.