There are certain requirement to be fulfilled to form a Private Limited Company
1. The number of members must be between 2-200.
2. There must be at least two directors and two shareholders
3. Each director must have a Directors Identification Number (DIN)
4. PAN card copy of directors/shareholders. Passport copy for NRI subscribers.
To form a private limited company there should be certain amount to be introduced by its shareholder and that is known as share capital. This can be of two types-
a) Authorized share capital – Authorized share capital is the number of stock units (shares) that a company can issue as stated in its memorandum of association or its articles of incorporation.
b) Paid up share capital- Paid-up capital is the amount of money a company has received from shareholders in exchange for shares of stock.
There are certain set of rules and regulation which any private company need to be adhere. These are called MOA and AOA.
Memorandum of Association (MOA) and Articles of Association (AOA) are the master documents of the private limited company determining the guidelines, mutual rights and duties between directors and shareholders. MOA comprises of 6 clauses –
• Name clause – under this the name of the company is specified. It should not be identical to any existing company’s name.
• Registered Office clause – This clause helps to determine the state jurisdiction of Registrar of Companies.
• Object clause – In this clauses, one defines the object of the company. The object comprises of all the activities or work to be carried in the organization.
• Liability clause – In this clause, the liability of the shareholders is defined. In case of the company limited by shared, the liability of the members or the shareholders is restricted by the amount each member has agreed to contribute.
• Capital clause – In this clauses defines the maximum number of share the company can issue.
AOA (articles of association) These are the rules and regulations for the management. It provides the internal guidelines to be followed in the organization. It consist of the rules regarding the transfer of shares, an audit of the company, voting rights of the shareholders, the appointment of directors, share capital etc.