Explain Private Limited Company.

A Private Limited Company, often abbreviated as Pvt Ltd or Pvt. Ltd., is a type of business entity that is privately held by a small group of shareholders. It is a popular form of business structure among entrepreneurs and small to medium-sized enterprises (SMEs) due to its distinct advantages and flexibility.

Key features of a Private Limited Company include:

• Limited Liability: Shareholders have limited liability, meaning their personal assets are protected in case of company debts or losses.
• Ownership: The company is owned by shareholders who hold shares of the company's stock. The number of shareholders is limited (typically up to 200) and shares cannot be publicly traded.
• Separate Legal Entity: A Private Limited Company is considered a separate legal entity distinct from its owners. It can enter into contracts, own assets, and sue or be sued in its own name.
• Management: The company is managed by directors appointed by shareholders. Directors may or may not be shareholders themselves.
• Financial Reporting: Private Limited Companies are required to maintain financial records and file annual financial statements with regulatory authorities.
• Less Regulatory Compliance: Compared to public companies, Private Limited Companies have fewer regulatory requirements and disclosure obligations.

Private Limited Companies are suitable for businesses looking to operate with limited liability, maintain privacy of financial information, and have flexibility in ownership and management. They are commonly used for small businesses, startups, family-owned businesses, and joint ventures where there is a need for a formal legal structure with the benefits of limited liability and corporate governance.