A private limited company enjoys both the advantages of corporate existence as well as that of partnership. Following are some of the privileges and exemptions of the private limited companies as compared to public limited companies. Special Privileges of a Private Company
Privileges of Private ltd companies
1. Number of members: A private company can be formed with just two members.
2. Allotment before minimum subscription: The private company can make allotment of shares even before the minimum subscription is received.
3. Prospectus: The private companies need not issue prospectus or file statement in lieu of prospectus with the Registrar of Companies.
4. Commencement of business: It can commence its business after receiving incorporation certificate. Whereas a public company can commence business only after receiving Certificate of Commencement of Business.
5. Number of directors: It requires only two directors.
6. Statutory meetings: Private company is not required to hold statutory meetings and file statutory report with the Registrar of Companies.
7. Index of members: It is not required to keep and maintain index of members.
8. Loan to directors: It can grant loan to directors without the permission of the government.
9. Qualification shares: Directors of the private company need not have qualification shares.
10. No restriction on the number of directors: The private company can increase its number of directors without the permission of the government.
11. Appointment of managing director: The private company can appoint a person as managing director, who has already been working as the managing director of other company.
12. Quorum of directors meeting: Only two directors are sufficient to constitute quorum.
13. Retirement of directors by rotation: The directors of private company need not retire by rotation.
14. Remuneration of Managers and Directors: There is no limit on remuneration of managers and directors of a private company. The change or increase in remuneration can be made without the approval of Central Government.