A Private Limited Company (Pvt. Ltd.) is one of the most popular business structures in India for startups, small, and medium-sized enterprises. It is governed by the Companies Act, 2013 and regulated by the Ministry of Corporate Affairs (MCA). This type of company requires a minimum of 2 directors and 2 shareholders, and it can have up to 200 shareholders.
The key feature of a Private Limited Company is limited liability, meaning the personal assets of shareholders are protected in case of any business loss or debts. It is recognized as a separate legal entity, which means the company can own property, sue or be sued in its own name.
A Pvt. Ltd. company enjoys high credibility and ease of fundraising from investors and banks due to its transparent structure and legal compliance. However, it requires regular statutory filings, annual audits, and board meetings, making it slightly more complex to manage than a sole proprietorship or partnership.
It is ideal for businesses looking to scale, attract investors, and build a trusted corporate image while maintaining ownership control within a limited group.
| Feature | Private Limited | One Person Company | Sole Proprietorship | LLP | Partnership |
|---|---|---|---|---|---|
| Applicable Law | Companies Act, 2013 | Companies Act, 2013 | Not Applicable | LLP Act, 2008 | Partnership Act |
| Suitable For | Startups & SMEs | Single Entrepreneurs | Individual Traders | Professionals | Traditional Businesses |
| Minimum Members | 2 | 1 | 1 | 2 | 2 |
| Taxation | 30% + surcharge | 30% + surcharge | Personal Income Tax Slab | 30% + benefits | 30% + surcharge |
| Compliance Requirements | High | High | Low | Moderate | Low |
| Ownership Transfer | Easy via shares | Transferable | Not Transferable | Transferable | Not Transferable |
Shareholders are not personally responsible for business debts or liabilities.
The company is a distinct legal person—it can own property, sue, or be sued.
Start your company with just ₹1; there's no capital threshold required by law.
Easily attract venture capitalists or angel investors to scale your business.
Enjoy exemptions, deductions, and lower taxes on distributed profits.
The company remains unaffected by changes in director or shareholder status.
Shares can be transferred easily with minimal legal documentation.
100% Foreign Direct Investment allowed under the automatic route.
Being MCA-registered boosts trust among banks, clients, and vendors.
Banks prefer lending to Pvt. Ltd. companies over unregistered businesses.
Apply for name availability via the MCA portal using SPICe+ Part A form.
Ensure the proposed name is unique and legally valid for your company.
The Ministry of Corporate Affairs approves or rejects the application within 3–4 working days.
Register the company within 20 days after name approval to avoid penalties.
If required, extend the registration time limit by paying an additional fee.
Directors must acquire a Digital Signature Certificate for signing documents online.
Use SPICe+ Part B to electronically prepare the Memorandum and Articles of Association.
Submit your company incorporation documents through the MCA’s SPICe+ integrated form.
The MCA will verify all documentation and process the application for approval.
Once approved, you'll receive your Company’s Certificate of Incorporation, PAN & TAN.