PRIVILEGES AND EXEMPTION OF PRIVATE COMPANY

MEANING OF PRIVILAGE

To give special advantages or benefits. A special right, advantage , available only to a particular person or group:

PRIVILEGES AND EXEMPTION OF PRIVATE COMPANY

It can be formed only by two members. it can allot shares before the minimum subscription is subscribed for or paid. It can start its business immediately after incorporation. it need not obtain a certificate of commence business. It need not issue or file with the registrar a prospectus or a statement in lieu of prospectus.

PRIVILEGES AND EXEMPTION OF PRIVATE COMPANY

Restriction relating to further issue of capital are not applicable to private companies. A private company may issue share capital of any kind and with such voting rights as it may think fit. It need not hold a statutory meeting and need not prepare a statutory report. Tow persons personally present form the quorum of a meeting of a private company, unless the articles provide for a large number.

PRIVILEGES AND EXEMPTION OF PRIVATE COMPANY

Poll can be demanded by one. If the number member present in a meeting is not more than seven and by two person, if more then seven member are present. The minimum number of directors in a private company is only two. A private company is not required to keep an index of members. As per rule, if the number of members exceeds fifty, then the company has to keep an index( (in a book or set of books) an alphabetical list of names)of a members, but its members limit is 50.

PRIVILEGES AND EXEMPTION OF PRIVATE COMPANY

Restriction on rights issue of shares i.e., issue of new shares applicable to a public company are not applicable to a private company.