Privileges and Exemptions available to a Private Limited Company

Privileges and Exemptions available to a Private Limited Company
A private limited company enjoys several privileges and
exemptions. It is therefore said to be an extension of partnership
but with the benefit of limited liability. Let us now see some
important privileges available to all private limited companies.

i. A private limited company can be incorporated with just two
persons. This facilitates easy formation as well as efficient
functioning.
ii. A private Limited company can commence business on getting
the certificate of incorporation. There is no necessity for getting a
certificate to commence business.
iii. A private limited company is prohibited from issuing prospectus
for collecting its share capital.
iv. It can proceed to allot shares without having to wait for getting
minimum subscription.
v. It is exempted from holding a statutory meeting.
vi. In the case of a public limited company, when further shares are
issued, they must first be offered to the existing shareholders. But a
private company is exempted from this restriction.
vii. A private company can work with just two directors.
viii. Directors of a private company are not required to file with the
Registrar a written consent to act as a director.
ix. Further they need not give any undertaking to take up any
qualification shares

Additional privileges enjoyed by independent private limited companies
The term ‘independent private limited companies’ refers to
those which are not subsidiaries of public limited companies.
i. All its directors can be appointed by a single resolution.
ii. Directors need not retire by rotation.
iii A person can be a director of any number of independent private
limited companies.
iv. Restriction regarding overall managerial remuneration which is
applicable to a public limited company is not applicable to a private
limited company.
v. A private limited company is exempted from maintaining an
index of its members with their names and addresses.