how do private limited companies raise capital?

Business Strategist

How do private limited companies raise capital?


From Relationships, financiers, banks, Foreign Banks, director, promoters, employees etc


Experts on this platform can not take the examination or invest/contribute any share.

Retired employee.

Individual borrowing and investing in the company, attracting new shareholders within the maximum limit, mergers etc.   Financiers and banks amount to borrowing and not treated as capital.  Search in google and you can find new methods.

Online Legal Service

As per Companies Act, 2013 there are certain clauses to be kept in mind when a private limited company is looking for options to raise funds. The following are the sources from where one can explore the funding options for a private limited company:

  • Directors
  • Relatives of Directors
  • Promoters
  • Members, subject to compliance with section 73 and other applicable provisions of Companies Act, 2013
  • Banks or any other financial institutions including foreign banks or financial institutions
  • From other body corporates
  • State and Central Government, etc.
  • Employees – The amount borrowed should not exceed the Employees’ annual salary

To learn in detail about all the available sources do read: Funding in a Private Limited Company: Sources & Mandates


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