# Private Company — Section 2(68)
A Private Company is one which:
1. has a minimum paid-up share capital as may be prescribed (currently NIL after 2015 amendment); AND
2. by its Articles of Association, satisfies all three restrictions below.
## The three Articles-based tests
| Restriction | What it says |
|---|---|
| (i) Transfer of shares | Articles must restrict the right to transfer its shares (e.g., right of first refusal in favour of existing members). |
| (ii) Cap on members | Limit members to 200 (does NOT apply to an OPC). |
| (iii) No public invitation | Articles must prohibit any invitation to the public to subscribe for any securities. |
## Counting members for the 200 cap — important carve-outs
- Joint holders of shares → counted as ONE member, not many.
- Persons NOT counted in the 200 limit:
- (a) Persons who are presently in the employment of the company.
- (b) Ex-employees who became members during employment and continue to hold shares after leaving.
## Section 8 company exception
The requirement of prescribed minimum paid-up share capital is NOT applicable to a Section 8 company — provided it complies with Section 92 (annual return) and Section 137 (filing of financial statements).
## Visual: How to test if a company is private
```
Step 1: Does Articles restrict share transfer? → No → Not private
Step 2: Does Articles cap members at 200? → No → Not private
Step 3: Does Articles prohibit public invite? → No → Not private
Step 4: Min PUSC as prescribed (NIL today).
All Yes → Private Company
```
## Quick contrast with Public Company
A Public Company is simply one that is NOT a private company (and has prescribed min PUSC). So absence of any one of the three Articles restrictions makes a company public.