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Cover image for Private Ltd, LLP or Public Ltd, what to choose when registering for a New company in India
Deepika Sharma
Deepika Sharma

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Private Ltd, LLP or Public Ltd, what to choose when registering for a New company in India

The modern era has seen the maximum number of entrepreneurial pursuits among men and women of all ages, especially the Millenials. The entire credit of the phenomenon should be shared between the entrepreneurs themselves, who start and sustain a fight against the market right from the front line and the technological advancements.

WITH INNOVATION COMES THE DILEMMA

Now that so many new businesses are coming up and the existing industries are flourishing, financial challenges have truncated, there is a dilemma as well. Most people face problems when it comes to the process of company registration in India. They can work the hardest in the room and get all the deals done immediately, but the only hurdle they face is legally setting up a company in India.

TYPES OF BUSINESSES

Generally, there are seven types of companies that you can go for:

  • Private LimitedPublic Limited

  • Partnership

  • One Person

  • Sole Proprietorship

  • Limited Liability Partnership

  • Section 8 Company
  • There are many different types of companies entrepreneurs can build; as a result, confusion is expected, and it’s quite reasonable. Here we have come forward to show you what the best path is. But you also need to consider the fact that not everyone’s opinion should follow. Instead, you must keep in mind what your most basic demands are.

    Also Read: Microfinance Institution in India for small loan

    TRUNCATE YOUR CHOICES

    Ask yourself, what do you exactly want out of your business, and believe us when we say that half of your problems regarding company registration in India will disappear. So, let’s focus on only two types of business registration that most entrepreneurs prefer when they start a new business in India. They are:

  • Private Limited Companies, and

  • Public Limited Companies.
  • Before you think of setting up a company in India, consider which of these types you wish to own. Let’s discuss them in details:

    PRIVATE LIMITED

    A Private Limited Company means small business. A minimum of 2 members is required to build such a company, with 200 set as the maximum limit. In this type of company, a group of shareholders constitutes the firm, and the total capital of the company is made up of the individual shares withheld by each member. In the case of Private Limited Companies, the member’s liability is limited to the number of shares they own. In this type of company registration in India, personal assets and business assets are treated separately, unlike sole-proprietorships.

    PUBLIC LIMITED COMPANY

    Shares of any Public Limited Company are open to being purchased by the general public. In terms of the legal and structural aspects of a Public Limited company is that it must have three directors and a minimum of seven shareholders. In the case of such a company, you can issue a virtually unlimited number of shares as opposed to its previous counterpart. You probably already know that the shares of public limited companies are listed on the stock exchange, and traders can trade them freely.

    Now, here’s the catch; when it comes to Public Limited Companies, the business organisations are ultimately owned by their shareholders. Before the companies that fall under this category, they will need a clearance certificate from the Registrar of Companies (ROC).

    Now that you are aware of these two different ways of setting up a company in India, you can decide wisely. Remember, as we said before, company registration in India is not a tough task, but having too many choices can ruin the fun. Think simple and get it done! Now anyone can start a new business in India quickly.

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