Types of Indian Companies

Types of Indian Companies

While starting a business, we all know what kind business we are going to do, what our product/service is, who our target audience are, the amount needed to run the entity, etc.

But when it comes to investment and registering a company we need to decide which category we need to fall under. There are different sets of Company options available, each has its own merit and demerit. We need to clearly look at our business vision and requirement before registering a company.

Mentioned below are some of the frequently faced hurdles in the entrepreneurship world.  You may be able to choose better, if you clearly set your vision for your business.


Proprietorship is a type of business unit that is owned and run by one individual or one legal person. The owner is in direct control of all elements and inventories and is legally accountable for the finances of such business. He receives all profits and holds all the responsibility for all losses and debts. The firm has no legal existence separate from its owner.


A partnership business is a popular form of business which is owned, managed and controlled by two or more people.  The owners of a partnership firm are individually known as the “partners” and jointly as a “firm.” A partnership firm is relatively easy to form as there are no tedious paperwork and legal formalities involved. The number of partners can vary from two to ten.

One-person Company

OPC or One Person Company is a new form of business introduced by the Companies Act, 2013. It enables the entrepreneur to carry on business in a sole proprietorship form of business. It is a hybrid of Company and Sole proprietorship. One of the disadvantages of OPC is that it must be converted to a Private Limited Company if is crosses an annual turnover of Rs. 2 Crores, which comes with its own set of taxations and limitations.

Limited Liability Partnership

A Limited Liability Partnership (LLP) is, as the name denotes is a partnership in which some or all partners have limited liabilities. That means in an LLP, one partner is not accountable or liable for another partner’s misconduct or negligence.

Private Limited

A Private Limited Company has shareholders with limited liability and its shares may not be offered to the general public, unlike those of a public limited company. One of the major restrictions of a Pvt. Ltd. Company is that the shareholders cannot offer their shares to the general public over a stock exchange, and the number of shareholders cannot exceed a fixed figure. It has its advantages as well. It continues to exist even if the shareholder desert it or in the event of the death(s) of the shareholders. It has less legal restrictions.

Public Limited

A Public Limited Company, as the name suggests, offers limited liability to its owners and stakeholders. In a Public Limited Company, the shares are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company. One of its noticeable features is that as an independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders.



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