Tag Archives: Unlimited Company

Limited in Limited Company??


I receive a question on Quora which may interest readers of this Blog. The question is –

What is limited in private limited company? I understand limited means limited liability but can someone explain with a detailed example about how this liability turns out to be limited. Please use numerical in the example. Lets consider 4 owners, each one has 25% stake in the company & the total investment is say 1 lac INR.”

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FORMATION OF A COMPANY


UPDATE: on 30th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

Section 3, 4 and 5 of the Companies Bill, 2012 Act 2013

In my last post, I discussed definition of companies and classes.

FORMATION OF COMPANY (SECTION 3):

A company may be formed for any lawful purpose by:

(a)    Seven or more persons as public company;

(b)   Two or more persons as private company;

(c)    One person as One Person Company

By subscribing names to a memorandum and complying other requirements.

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