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Rohan Kute
Business | infograph... • 6m
If you ever wonder to start a company, you should have to know this. There are three types of companies: 1) Private Limited Company Eligibility: Minimum 2 directors and 2 shareholders (at least 1 Indian resident). Pros: Limited liability protection. Easy to raise funding from investors. Separate legal identity. Perpetual existence. Recognized and trusted business structure. Cons: Higher compliance and legal formalities. Mandatory audits every year. Higher registration and maintenance cost. Requires professional help (CA/CS). Ownership transfer needs documentation. --- 2) LLP (Limited Liability Partnership) Eligibility: Minimum 2 partners (1 must be Indian resident). Pros: Limited liability for partners. Lesser compliance than Pvt Ltd. No audit required if turnover < ₹40 lakh. Separate legal entity. Best for service-based businesses. Cons: Cannot raise equity funding easily. Can't issue shares. Less recognized by investors. Annual MCA filing is mandatory. Conversion to Pvt Ltd is complex. --- 3) Partnership Firm Eligibility: Minimum 2 partners. (Registration optional) Pros: Very easy and cheap to start. Minimal compliance. Full control and flexibility. No MCA involvement. Good for small/traditional businesses. Cons: Unlimited liability. Not a separate legal entity. Hard to raise external funds. Less legal protection. Ends if a partner leaves or dies.
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