Pvt Ltd Company by the name itself says that it can be owned by common people but it has to be registered by the Government. The Government paves way for the common people to start the business. Minimum two persons are needed to start a private limited company. Private limited Company Registration in Trichy says that maximum shareholders must be 200. They cannot raise money from general public. The company limited by guarantee is formed by non-profit organisation like sports club. This does not have any shareholders. But it is run by guarantors and these guarantors agree to pay lump amount towards company debts. Such guarantor may be a corporate body or any person. The company limited by guarantee should have one guarantor and one director. Even one may take these two positions.
Private limited Company Registration in Trichy says that the company limited by guarantee can act like a company. It can hire employees, can raise fund from bank, buy or sell property, defend lawsuit. The company limited by guarantee takes the name ‘limited’. It can be used for non-profit purposes. The profit obtained can be reinvested and the same can be used for promoting non-profit activities. This form is sometimes preferred over the industrial and provident society because company law allows multiple classes of member and with separate voting constituencies.
Subsidiary Pvt Ltd Company
In a company if 51% of the share is held by other company then it is called subsidiary company. If 100% of company shares are held by other company then it is called as 100% subsidiary private limited company or wholly-owned subsidiary. In short a subsidiary company is controlled by other company. Private limited Company Registration gives an example that; George Pvt ltd Company has 100% shares of the other company namely Hanes Pvt Ltd Company, and then Hanes Pvt Ltd Company is the subsidiary of George Pvt ltd Company. George Pvt ltd Company is also called as holding company. Holding company is also known as parent company. So this system is useful for protecting properties from each other’s liabilities. For an example if A is holding company that has B, C, D and E companies then if company E is sued then other B,C,D companies are not affected.
Private limited Company Registration in Trichy says that parent company should have an oversight to the subsidiary. The subsidiaries’ assets are taken then it means that parent company has day-to-day supervision over subsidiary. Hence the holding company can control the Board of Directors of another company, also more than half of the total voting power of the other company, also more than half of the nominal value of other company and also more than half of the equity share capital of other company. The subsidiary company should have mandatory declaration to be filed under Section 89 of Companies Act 2013 in case of wholly owned subsidiary company.
Private limited Company Registration says about capital and revenue profit. If the amount earned by the subsidiary before acquisition is called capital profit. After acquisition the situation changes. It is owned by other company. So the amount earned after acquisition then it is called revenue profit. Also unrealised profit can be defined as goods that are not sold at the end of the year. The holding company receive dividends from subsidiary company and this dividend should be eliminated while consolidating profit and loss account.
Consolidation of balance sheet
The balance sheet of holding company and subsidiary company are combined in consolidated balance sheet. The share of minority and share of holding company must be considered while consolidating balance sheet. Private limited Company Registration says that the date of balance sheet of holding and subsidiary companies should be the same. And also the unrealized profit, dividend, debtors and creditors, bills receivable and payable, loans and debentures which are known as common transaction must be eliminated when preparing consolidation of balance sheet.
The disadvantage of holding company comes when audit, income tax are in complex. It has interest in establishing monopoly over the market. Private limited Company Registration says that this monopoly is against public interest. And also it is a costly management.
Advantages of Holding company
Private limited Company Registration in Trichy says that holding company provides,
Buying power, employees, technical expertise to the subsidiary companies
Capacity to start new companies and products
And the subsidiary company can enjoy the goodwill of the holding company.
A private company has the above features which can be treated as separate property. There are multiple relationships with the directors. The most essential quality for leadership is not perfection but credibility- said Rick Warren. So a private limited company when registered has the people’s confidence and very easy to raise funds. To protect personal assets, various measures are taken as discussed above. Hence there is separation between management and ownership.
I hope this article will help you. We Smartauditor provides all types of company registration, IPR Services, and GST Registration all over Tamilnadu. Our Services are cost-effective and we offer full time support at any time.