Private Limited Companies are those types of companies where minimum number of members is two and maximum number is two hundred. These are closely held businesses usually by family, friends and relatives.Private companies may issue stock and have shareholders. However, their shares do not trade on public exchanges and are not issued through an initial public offering.Shareholders may not be able to sell their shares without the agreement of the other shareholders. The main restriction The Company is a Private Company within the meaning of Section 2(68) of the Companies Act, 2013 and accordingly:-
- Restricts the right to transfer its shares;
- Limits the number of its members to two hundred:
- Prohibits any invitation to the public to subscribe for any securities of the company;
These are major restriction that are put on private company to safeguard the interest of the investors.