Private Limited Company Registration Coimbatore

Monday, 11-February-2019

Procedure for Incorporation of Private Limited Company by Guarantee :-

A Private Limited Company having the liability of its members limited by the memorandum of association to such amounts as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up, is

known as company limited by guarantee.

The procedure for incorporation of a company limited by guarantee is the same as the one required to be followed for getting a public or a private limited company incorporated. However, the following distinctive features in the case of a company limited by guarantee must be noted: -

(i) A Private Limited Company by guarantee mayor may not have a share capital.

(ii) A Private Limited Company by guarantee may be a public company or a private company.

(iii) According to Sub-section (2) of Section 13. of the Companies Act, 1956, the memorandum of association of a company limited by guarantee

must state that the liability of its members is limited. The memorandum of association of a company limited by guarantee must also state that every member of the company undertakes to contribute to the assets of the company in the event of its being wound up while he is a member or within one year after he ceases to be a member, for payment of the debts and liabilities of the company, or of such debts and liabilities of the company as may have been contracted before he ceases to be a member, as the case may be, and of the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributors among themselves, not exceeding one hundred rupees [Refer to Sub-section (2) of Section 13 of the Companies Act, 1956 and 5th clause of memorandum of association of a company not having a share capital and having a share capital respectively and Tables C and D respectively of Schedule I to the Companies Act, 1956].

(iv) Sub-section (2) of Section 27 of the Act lays down that the articles of association of a company limited by guarantee shall state the number of members with which the company is to be registered.

(v) Section 37 (1) of the Act prohibits a company limited by guarantee from having any provision in its memorandum or articles or in any resolution purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member.

(vi) Sub-section (2) of section 37 lays down that in the case of a company limited by guarantee, every provision in its memorandum or articles or in any resolution purporting to divide the undertaking of the company into shares or interests shall be treated as a provision for a share capital, notwithstanding that the nominal amount or number of the shares or interests is not specified thereby Private Limited Company Registration.