Private limited company is a perfect start for anyone who wants to start their business to give it a separate legal identity. Private limited company can be formed with ease and its procedural compliance are also easy when compared to that of a public company.

A private limited company, or LTD, is a type of privately held small business entity. This type of business entity limits owner liability to their shares, limits the number of shareholders to 50, and restricts shareholders from publicly trading shares.

1. Members: To start a company, a minimum number of 2 members are required and a maximum number of 200 members as per the provisions of the companies act 2013.
2. Limited Liability: This is perhaps the most important feature of Private Limited Company. Imagine a scenario, where someone filed a claim against you more than your business assets. In such a case, your personal assets can also be bought and sold to pay the debt.
3. Number of Directors: As per the Act of 2013, a Private Limited Company needs to have at least 2 directors. Although they are not required to appoint any independent directors.
4. Limited Liability: In a Company, a person holds liability to the amount of shares he holds. Unlike partnership, there will be no risk on the assets of a shareholder and he will not be required to pay anymore than the value of the shares he holds.
5. Fund Raising Capacity: It is the only form of business other than public limited company to raise fund from the Venture Capitalist or Angel investors. It cannot go to public like other big companies.
6. Protection Against Liabilities: if the company became insolvent the investment in the company would be lost but the shareholders would not be pursued for any shortfall to pay creditors unless they were proved to have acted recklessly.
7. Prospectus: The private companies need not issue prospectus or file statement in lieu of prospectus with the Registrar of Companies.
8. Deposits cannot be accepted– Company cannot appeal for money from the public .There are also some restrictions on the sale or transfer of its shares by the shareholders.
9. Minimum subscription– Company receives the amount which is 90% of the shares issued within a certain period of time. In case the company if the company is not able to receive 90% of the amount then they cannot commence further business.