Definition of Private Company? Meaning of Private Company? What is Private Company?

Private Company: A private company is one whose constitution:

• restricts the right of its members to transfer their shares in the company; and
• limits the number of members that the company can have to not more than 50.

The restriction on the right to transfer shares in a private company usually takes the form of a requirement that the transfer be first approved by the company’s board of directors or a requirement that the shares be first offered to be transferred to existing shareholders.