To incorporate, a private company under the Companies Act, 2013, two persons are required as a subscriber to the Memorandum of Association (constitution document) and Articles of Association (bye-laws of the company). On incorporation, the subscribers become shareholders if the company is limited by shares. Subscribers can be an individual (natural person) or artificial legal entity (for instance a company).
A private limited company must have a minimum of 2 directors and one of the directors shall be resident in India. Director resident in India means a director who stays in India for a period of not less than 182 days during the financial year (1st April to 31st March).
A private company can be –
- A private company limited by shares; or
- A private company limited by guarantee; or
- An unlimited private company
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