According to Section 3(1) (iii) as amended by the companies (amended) Act, 2000, a private company means:-
A company which has a minimum paid up capital of one lakh rupees, or such higher paid up capital as may be prescribed by its articles provides for the following restrictions.
- Restricts the rights of members to transfer the shares
- Limits the number of its members to fifty and
- Prohibits any invitation to the public to subscribe for any shares or debentures of the company.
- Prohibits any invitation or acceptance of deposit from persons other than its members, director’s or their relatives.
However, u/s. 25, companies not for profit have been exempted from the provision of minimum paid up capital of Rs. 1 lakh.
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