Gujarat is a state located on the western coast of India. The major agricultural produce of the state includes cotton, groundnuts (peanuts), dates, sugar cane, milk, and milk products. Industrial products include cement and petrol. In 2010, the Forbes list of the world’s fastest-growing cities included Ahmedabad as number 3 after Chengdu and Chongqing China.
It is a state which offers us enormous business opportunities and a scale of enterprises. A business start-up or a company start-up is a decision of an entrepreneur and requires in-depth strategic, business, and legal considerations.
If you want to build a business in India, Gujarat is a place you should consider with utmost importance. Once you have come up with a business idea and decided to start a business you will need to follow the Company Formation Procedure in India.
Small, medium, and large businesses in India consider a Pvt Ltd Company as one of the most popular legal structures. Anyone looking to build a scalable business can choose it. Registering a Pvt Ltd Company requires a minimum of two members and allows for a maximum of two hundred members.
A Pvt Ltd Company is a type of small business entity that is held privately. In addition, the liability of members is limited to their shares and there can be a maximum of 200 members. Further, a Pvt Ltd Company cannot invite the general public for subscribing to its securities. Ministry of Corporate Affairs (MCA), Companies Act 2013, and Companies Incorporation Rules, 2014 govern the Pvt Ltd Company registration in India.
The liability of shareholders is limited towards creditors, it is restricted only to the unpaid amount of shares. For that reason, banks/creditors can sell only the company’s assets but not the personal assets of directors and shareholders in case of default.
As a Private Limited Company can raise funds from outside India limits the liabilities of its shareholders, and offers employee stock options to attract top talent, it is generally chosen by startups and growing businesses.
Moreover, as these entities must hold board meetings and file annual returns with the Ministry of Corporate Affairs (MCA), they tend to be viewed with more credibility than a Sole Proprietorship or General Partnership.