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Dear friends,
I have a problem in the organization, request Ur valuable answers:
Problem: I recruited a candidate and given email offer letter with the date of joining. One of his company employees passed the info that he is working with the concern only for 4 months. Well in the given profile to me it is stated that he is working there from November 2009 onwards.
On the safer side, I did a third party background verification and found that he is working there from November 2009 onwards as mentioned in the resume. I informed the candidate to bring his offer letter, relieving letter and last 3 months pay slip to make clear of the fact.
Now, I hear that the company he works is only a proprietary concern and they don’t issue offer letter and pay slip. Can I go ahead in hiring this person? Can the proprietary concern take any action up on it? What is the exact difference between proprietary concern and Private Limited Company?

From India, Madras
Dear Biju, IF you believe your third party verification is right then you can go head. There are many proprietary organisation which doesn’t give any offer letter and pay slip.
From India, Hyderabad
Dear Biju,

I agree with Santosh.

reply to your second question:

Proprietorship concern:

1. Owner is an Individual

2. Owner is responsible for all activity of the proprietorship concern.

3. There is lack of internal control system. It is always flexible as per wish of owner

4. Less rules & regulations

Private Limited Company

1. Private Limited Company is governed by the Companies Act, 1956

2. Registration: The registration of a company is compulsory. There are two stages in registering private limited company, the first is ‘Incorporation’ and the second is ‘Commencement of Business’. A private limited company can start business after obtaining certificate of incorporation.

3. Number of Members: There must be at least two persons for starting a private company and maximum number of members can be fifty.

4. Legal Status: A Private Company has a separate legal entity. It has a common seal and can enter into contracts by affixing its seal. Members of the company can also enter into contract with the company.

5. Liability: The liability of shareholders is limited to the value of shares held by them. The members are not personality liable for the obligations of the business.

6. Transfer of Shares: A shareholder can sell his shares whenever he feels so. There is no binding no the transfer of shares of a company.

7. Management and Control: A private company is managed by elected representatives of the shareholders.

8. Statutory Obligations: A private company is required to maintain prescribed books and have a periodical audit. Some information has to be supplied periodically to the Registrar of Companies.

9. Continuity: The continuity of a company is not affected by the death or insolvency of a member. The members may go on changing but the company will not be affected.

10. Authority of Members: A shareholder has not implied authority to bind the company. A shareholder cannot act on behalf of company.

11. Winding Up: A private company is wound up only through court. If the court is satisfied that there is a reasonable ground for winding up the company only then it is to be wound up. A proper procedure is also to be followed

From India, Delhi
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