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PRIVILEGES AND LIMITATIONS OF PRIVATE LIMITED COMPANY

Updated: Jan 20

PRIVILEGES TO PRIVATE COMPANIES

1. Private Companies are not required to appoint Independent Director;

2. Private Companies are not required to appoint Woman Director;

3. Provisions regarding rotation of directors not apply on Private Companies;

4. Private Companies are not required to form Audit Committee, Remuneration and Nomination Committee; 5. Maximum Ceiling of managerial remuneration do not apply on private companies;

6. Private Companies are not required to appoint Secretarial Auditor;


LIMITATIONS OF PRIVATE COMPANIES:

1. Securities of Private Companies are not freely transferable;

2. It is very difficult for private companies to access external financial assistance;

3. Securities of a private company are not listed on stock exchange, therefore a shareholder/security holder cannot know the real value of his investment in a private company;

4. Public has little confidence in a private company because its affairs are unknown and it is not subject to strict control under the law;

5. In a Private Limited Company the number of shareholders in any case cannot exceed 200;



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