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Private limited co.

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This query is : Resolved

Varun Bansal (Querist)
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24 August 2014 In Private limited Co. public funding is not allowed... still there r so many restriction or long procedure required on filing of documents Why? :(

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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24 August 2014 The restriction are there to ensure that there is no misuse of Pvt Ltd company. Many Pvt Ltd company used to be created only for fraudulent purpose. For promoting money laundering and other illegal practices. It was easier for these Pvt Ltd companies to hide these due to lesser disclosure and less stringent laws. Many such pvt ltd companies used to be only paper companies having no existence at all. A person used to be director in Unlimited no of pvt ltd companies since there was no restrictions on the same.

Due to all these reasons more compliance/disclosure requirement and less exemption has been given to Pvt Ltd companies.

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