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How is a Private Limited Company different from other forms of businesses?


Comparing private limited company to other form of companies.

  • A private company is recognised in law as a person. Hence the Company is distinct from its Shareholders or Directors.

  • The Liability of the Shareholders is limited to the unpaid amount of the equity share capital.

  • In a sole proprietorship or a Partnership, the entities are not recognised as Legal persons and the individuals are personally liable for the issues relating to the business.

  • A Limited Liability Partnership is recognised as a person in Law with a less stringent control framework. There could be practical limitations however to its expansions of business.

  • A public limited company is a larger set up with larger number of shareholders and directors. The compliance requirements with law are higher. Hence it may be good to progress to a public company over a period of time after doing business as a private company, using it as a platform.

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