A Private Limited Company means a corporation or corporate body which is registered under the Companies Act 2017 for doing any kind of business. For example trading, services, or manufacturing. Private limited companies are of two types.

• Limited by Shares: whose shareholders liability is limited to their investment or shares held.
• Limited By Guarantee: in these types of companies shareholders’ liability is limited to the Guaranteed amount that shareholders agreed upon.

It is a basic principle that The corporation is a separate legal person from its shareholders or owners and has its rights and duties. The only difference is that company is an artificial person whereas shareholders (individuals)  are natural persons. To simplify the companies can own assets or property in their name, take loans, singed the contracts, and also be personally liable for all of its taxes payable.

The other most important feature of companies is that members’ liability to pay back the debts of the company is limited to the amount of any unpaid capital which they have agreed to pay at the time of its incorporation. In other words, a business is personally responsible for the payments of all of its dues, not the directors or shareholders. As an example, if the corporation has taken a loan of 500, 000 and one of its shareholders has own shares worth 100, 000  from which amount of 50,000 remains unpaid. Then the shareholder has no responsibility for payment of all debt of the organization, he has to pay the only unpaid amount of 50,000.