Glossary · Corporate Law
Private Limited Company
A company that restricts the right to transfer its shares, limits the number of members to 200, and prohibits any invitation to the public to subscribe to its shares or debentures.
A private company is defined under Section 2(68) of the Companies Act, 2013. It must have a minimum of 2 and a maximum of 200 members (excluding current and former employees). It must have at least 2 directors and use the suffix 'Private Limited' in its name. Private companies enjoy several exemptions from public companies — they need not hold an AGM, file a Cash Flow Statement, or appoint an independent director, and have a lower audit threshold for related-party transactions.
Examples
An IT services startup incorporated as FinTax24 Tech Private Limited is a private limited company with 2 shareholders and 2 directors.