How To Turn Your Business Into Private Limited Company

How To Turn Your Business Into Private Limited Company? A Complete Guide

Incorporate Your Company

Are you aware of all the numerous advantages your company is currently missing out on? It’s all because your company isn’t incorporated yet. Let’s begin with understanding the meaning of company incorporation. It simply means to turn your business into a corporate entity. Understanding the difference between a company and a corporation is the first step, to begin with, the process of company incorporation, especially the entrepreneurs starting their new venture.

Understanding Types Of Incorporation

Understanding Types Of Incorporation in Private Limited Company

You thought you understood the incorporation process? Just wait until you hear about the various types of incorporation that are present out there. There are several options available to choose from while registering your company.

  1. Private Limited Company (Pvt Ltd)
  2. Public Limited Company
  3. Partnerships
  4. LLp Registration
  5. One Person Company
  6. Sole Proprietorship
  7. Section 8 Company

What is Private Limited Company?

Heading on to understand what private limited companies are all about. It is one of the most popular types among the seven other types of incorporation available. A Private Limited Company refers to a privately held entity usually for small businesses. The liability is privately shared by the shareholders amongst themselves. This is practised to protect personal assets.

There is a clear distinction between the personal and the business assets of the members which results in ensuring security and protection. The liability of a shareholder is equivalent to the share held. There is also a distinct way of sharing the trade of such entities. Private limited companies’ shares cannot be traded publicly. 

Traits of Private Limited Company

The number of members – A minimum of 2 members and a maximum of 200 are required.

Limited Liability – Limited Liability of each shareholder, saves the shareholders’ personal assets from risk. 

SuccessionIt has perpetual succession through various situations like death, insolvency, or even bankruptcy. The company exists through anything.

Index of numbers – Holding the added benefit over the public entity, it doesn’t require to maintain an index of its members

Directors – The number of directors must be 2. 

Paid-up capital – A minimum paid-up capital of rs 1 lakh or above is a must.

Prospectus – No need for a statement with detailed information about the company and its working which is issued by the company for the public. 

Name – The suffix of Private Limited must be used after the name of the company

Minimum Subscription – Private Limited Company does not need the minimum subscription for the allotment of shares to the public. 

Benefits of choosing Private Limited Company

Benefits of choosing Private Limited Company

There are some exclusive benefits of the entity of a Private Limited Company in India viz. Easy transfer of shares by just shining of share certificate, higher borrowing capacity enables the company to seek external financial help, and a separate legal entity allows the company to take up loans. That’s not all, there are several more advantages like

  • Lesser number of shareholders, hassle-free decision making
  • The minimum number of shareholders is as low as 2.
  • Does not require to disclose the information and their financial reports to the public.
  • Flexible decision-making for short-term and long-term both.
  • Not under the pressure of the stock market
  • Minimum share capital required
  • Confidential information remains intact

What is in there for startups?

Small businesses and startups gain the credibility and reputation of a well-established business by registering themselves as a Private Limited Company. It elevates their impression in front of financial institutions, customers, and others. It helps them to get loans from banks or other institutions at minimum compliance at the beginning stage of the business. 

Thinking About Keeping it Private?

Now that you know about all the benefits of registering your business as a Private Limited Company, are you ready to incorporate yours? Avail all these benefits without falling into the rut of extensive documentation and hassles of registration. Wondering how to do that? You just need to call Egniol services and everything will be taken care of. 


Our professionals at Egniol, provide you with a start-to-finish service for all your business needs. We ensure that you complete the formalities without any delay and receive the ‘Private Limited’ suffix to your company name at the earliest. Startup owners get in touch with us today. 

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