Can a Private Limited Company own property in its own name?
A private limited is a separate legal entity that is formed as per the provisions of Companies Act, 2013. To form a private limited company you must have a minimum paid-up capital along with at least 2 members and directors. Here concern Can a Private Limited Company own property in its own name? Since a company enjoys a separate legal status it can enter into transactions in its own name.
It can even sue people or entities in court and get sued upon in its own name. It can also accept debts and loans from people and other entities. For instance, current accounts in banks are opened in the name of a company and not an individual. Whenever there is a transaction in it, it is termed as entity's transaction.
A private limited company is one of the best forms of entity that provides limited liability and perpetual succession. It does not require large capital contribution to start a firm. However, it restricts transferability of shares among members of a company.
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Owning a property in its own name
Many a times question arises as to whether a private limited company can own a property in its own name or not. The answer to which is yes, it can hold a property in its own name. It can buy, hold and sell a property in its own name. As per provisions of Companies Act, 2013 a private limited company must have a registered office within 15 days of issue of Certificate of Incorporation (COI).
The registered office must be in the name of the company. It can be owned or leased, but the agreement must be in company's name.
A private limited company can also hold other properties under its name, be it commercial or residential. As per Income Tax and Companies Act, 2013 a company is an artificial person with a separate entity that allows it to purchase properties under its name using the common seal and an authorized signatory. Purchasing a property is like getting into any other transaction.
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