Private limited company registration in Trivandrum
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A private limited company is one of the best approaches to start-up your business in India. Shareholders and directors are only exposed to a limited amount of the company’s liabilities. However, ownership is subject to some restrictions. Directors and shareholders may be different in a private limited company.
The organization can enlist with at least two individuals. The private limited company was established in India after the authority to issue the certificate of incorporation was obtained. Besides, it can require 15 working days to register for a privately limited company.
Features
Limited liability
A shareholder of a Pvt ltd company having Private limited company registration in Trivandrum has limited liability for their personal assets. It expands the organization responsibility by paying from investors. As a result, shareholder risk is lower than that of company owners.
Trustworthy
Under the Companies Act of 2013, all Indian businesses must be registered with the ROC. You can examine the company’s specifics through the Ministry of Corporation. In addition, you will have all the data with respect to the organization’s director. There building a private venture is dependable.
Legal entity
A private limited company with Private limited company registration in Trivandrum gives a legitimate substance. It implies that the organization is answerable for its resources and liabilities. Additionally, you are not to blame for it. Because of this, the creditors will not attempt to take money from you.
Private limited companies can sell shares on the stock exchange
No, private limited companies cannot sell shares on the stock exchange in India. As per the regulations, only public limited companies can offer their shares to the general public through the stock exchange.
Pvt ltd companies with Private limited company registration in Trivandrum can only issue shares to a limited number of shareholders, and they cannot raise funds from the public by issuing shares or debentures.
The shares of a private limited company are not freely transferable, and they can only be sold or transferred with the consent of the other shareholders of the company.
This means that the shares of a private limited company are usually held by a small group of people, such as family members, friends, or business partners.
However, private limited companies can raise funds from angel investors, venture capitalists, and private equity firms by offering them equity shares in the company.
These investors provide funding to the company in exchange for a share of the ownership and profits of the company.
In addition, pvt ltd companies with Private limited company registration in Trivandrum can also raise funds by issuing debentures to the public or private investors.
However, the total number of debenture holders cannot exceed 500, and the issue of debentures must comply with the regulations laid down by the Securities and Exchange Board of India (SEBI).
In summary, private limited companies cannot sell shares on the stock exchange in India, but they can raise funds from private investors and issue debentures to the public or private investors subject to compliance with the regulatory requirements.
How to sell private company shares?
Selling private company shares is a complex process that involves finding potential buyers, negotiating the terms of the sale, and complying with legal and regulatory requirements.
In India, pvt ld companies that has Private limited company registration in Trivandrum are not listed on stock exchanges, so selling shares of a private limited company requires a different approach than selling shares of a publicly traded company. Here are the steps involved in selling private company shares:
1: Determine the Valuation of the Company
Before selling shares of a pvt ltd companies with Private limited company registration in Trivandrum, one has to consider whether it is important to determine the valuation of the company.
The valuation is the process of determining the worth of the company, which is based on various factors such as the financial performance, market trends, growth potential, and competition. Valuation can be done by a professional valuation firm or by an investment bank.
2: Find Potential Buyers
Once the valuation is determined, the next step is to find potential buyers for the shares. The buyers can be individuals, private equity firms, or institutional investors who are interested in acquiring a stake in the company.
Finding potential buyers requires networking, contacting industry professionals, and using online platforms to reach out to interested parties.
3: Negotiate the Terms of the Sale
After finding potential buyers, the next step is to negotiate the terms of the sale. This is done for company with Private limited company registration in Trivandrum.
The terms may include the price per share, the percentage of ownership to be sold, and any other conditions of the sale.
Negotiating the terms of the sale requires careful consideration of the needs and interests of both the buyer and the seller. It is advisable to hire a legal professional to assist in the negotiation process.
4: Execute the Sale Agreement
Once the terms of the sale are agreed upon, the next step is to execute the sale agreement.
The sale agreement is a legally binding document that outlines the terms of the sale, including the price, the percentage of ownership to be sold, and any other conditions of the sale.
The sale agreement must be signed by both the buyer and the seller, and it must comply with the legal and regulatory requirements.
5: Transfer Ownership of Shares
After the sale agreement is executed, the next step is to transfer ownership of the shares.
This involves transferring the shares from the seller to the buyer and updating the company’s records to reflect the change in ownership.
The transfer of ownership must comply with the legal and regulatory requirements of a company with Private limited company registration in Trivandrum. And it must be properly documented.
6: Report the Sale to the Relevant Authorities
Finally, after the sale is completed, it is important to report the sale to the relevant authorities, such as the Registrar of Companies and the Income Tax Department.
This involves filing the necessary documents and paying any applicable taxes or fees. Failure to comply with the legal and regulatory requirements can result in penalties and fines.
Benefits of private limited company registration
Perpetual Existence:
A Pvt ltd company with Private limited company registration in Trivandrum has perpetual existence, which means that the company continues to exist even if one or more of its shareholders leave the company or pass away.
Professional Image:
A private limited company has a more professional image than other forms of business structures, which can help to attract customers, suppliers, and investors.
Easy Transferability of Shares:
The shares of a company having Private limited company registration in Trivandrum can be easily transferred from one shareholder to another, which makes it easier to raise capital and attract investors.
Tax Benefits:
A private limited company is eligible for various tax benefits and incentives provided by the Indian government, such as lower tax rates on profits, deductions for certain expenses, and exemptions on capital gains tax. Thus Private limited company registration in Trivandrum is important.
Conclusion
Private limited company registration in India offers several benefits. These benefits make pvt ltd companies an attractive option for entrepreneurs and investors who are looking to start and grow a successful business in India.
The shareholders of a company with private limited company registration in Trivandrum have greater control over the management and direction of the company, which allows them to make strategic decisions that align with their vision and goals for the business. Hence Private limited company is always desirable and its registration is important.
