Private Limited Company

A Private Limited Company (Pvt Ltd) in India is a separate legal entity with limited liability for shareholders, whose shares cannot be publicly traded.

Key features include:

1. Shareholders: Minimum 2, maximum 200.
2. Directors: At least 2, one residing in India for at least 182 days in a financial year; all must have a Director Identification (DIN).
3. Advantages:
   • Independent legal entity capable of owning property and incurring debt.
   • Limited liability for shareholders based on their share investment.
   • Perpetual succession ensures continuity despite changes in membership.
   • Fewer formalities than public companies.

While Pvt Ltd companies cannot raise funds via public listing, they are a popular choice for foreign entities due to their operational ease and limited regulatory burden.

Public Limited Company

A Public Limited Company (PLC) in India is a separate legal entity with shares that can be publicly traded on stock exchanges.

1. Key Features:
   • Shareholders: Minimum 7, no maximum limit.
   • Directors: At least 3, with one Indian resident.
   • Compliance: Must follow SEBI regulations if listed.
2. Advantages:
   • Legal entity & limited liability: Operates independently with limited shareholder liability.
   • Perpetual succession: Continues despite changes in membership.
   • Fundraising: Can raise funds publicly and access debt instruments like debentures.
3. Disadvantages:
   • High compliance burden: SEBI and corporate governance requirements.
   • Market volatility: Share value fluctuates with market conditions

While Pvt Ltd companies cannot raise funds via public listing, they are a popular choice for foreign entities due to their operational ease and limited regulatory burden.

One Person Company (OPC):

A One Person Company (OPC) in India is a separate legal entity with limited liability, owned and managed by a single Indian resident (120-day stay required in the preceding financial year).

Advantages

• Separate legal status and limited liability.
• Low setup cost, simple management.
• Direct control with sole profit ownership.

Disadvantages

• Limited business scope.
• Cannot convert to a Section 8 (Non-profit) Company.
• Restricted from Non-Banking Financial Investment activities.

OPCs are ideal for small businesses seeking simplicity and control but have specific operational limitations.