Explain Private Limited Company.
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A Private Limited Company is a type of business entity that is privately held by a small group of shareholders. In most jurisdictions, it is denoted by the suffix "Private Limited" or "Pvt Ltd" after the company's name.
Key characteristics of a Private Limited Company include limited liability protection, which means that the liability of shareholders is limited to the amount of their investment in the company. This protects the personal assets of shareholders in case of business debts or legal liabilities.
Private Limited Companies are governed by the laws and regulations of the country in which they are incorporated. They typically require a minimum number of shareholders, often ranging from 2 to 200, and may have restrictions on the transfer of shares.
While Private Limited Companies offer limited liability protection and separate legal entity status, they are subject to certain compliance requirements, such as annual filing of financial statements, maintenance of statutory records, and adherence to corporate governance standards. Despite these requirements, Private Limited Companies are popular choices for small and medium-sized businesses due to their flexibility, scalability, and ability to attract investment.