Private Limited Company Nature of Business
The meaning of private company and the manner in which a public company is defined bear out the argument that these two categories of company are naturally exclusive. A private limited company which has become a public company by section 43.The basic difference between of this provision defines one hand a company which is incorporated as a public limited company under section (44) and on the other hand a private company which has become a public company by reason of the registration of section (43).
There are three specific type of company to attend a distinct place in the scheme of companies act they are
- The Private companies of scheme
- The Public companies of scheme
- Private companies which has becomes public company by virtue of section 43.
Private Limited Company of Nature
A private limited company is in substance of a partnership and the relationship among the members in the matter of the conduct of the affairs of the company should be examined on the footing that they are partners so long as the company continues to be a private limited company registration.The definition of section (3) with in the object of a private limited company may control the shares to transfer and place certain restrictions on it.
To constitute a private company the requirements of sections (3) had to be compiled with and such provisions to be included in the objects.The advantages and exceptions shall fail designated of the specification of company advised on private companies treated as it is not a private limited company.
Private Company Deemed to Public Company
A private limited company have be deemed to be a public limited company under the following situations.
- Where not less than twenty five percent of the paid up share capital of a private company having a share capital is held by one or more bodies to incorporate in Chennai.
- The private companies average turn over is not less than the prescribed amount during the three immediately preceding consecutive financial years.
- A public company share capital of twenty percent of the paid holds not less than a private company.
- Where a private company invites or renews deposits from the public.