{"id":14441,"date":"2026-05-27T07:43:08","date_gmt":"2026-05-27T07:43:08","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/private-limited-company\/"},"modified":"2026-05-27T07:43:08","modified_gmt":"2026-05-27T07:43:08","slug":"private-limited-company","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/private-limited-company\/","title":{"rendered":"Private Limited Company"},"content":{"rendered":"

A Private Limited Company<\/a> (Pvt Ltd) is the most common form of incorporated business in India. It is a separate legal entity with limited liability for shareholders<\/a>, restricted share transferability, and a minimum of 2 and maximum of 200 shareholders. It cannot offer shares<\/a> to the general public.<\/p>\n

What Is a Private Limited Company?<\/h2>\n

A Pvt Ltd company is registered under the Companies Act, 2013. Key features:
\n– Separate legal entity: the company can own property, sue and be sued, and enter contracts in its own name
\n– Limited liability: shareholders are not personally liable for the company’s debts beyond their investment
\n– Restricted share transfer: shares cannot be freely transferred without board approval
\n– Minimum 2 shareholders, maximum 200 (excluding employees who hold shares)
\n– Cannot issue shares to the public or list on a stock exchange<\/a><\/p>\n

Incorporation Requirements<\/h2>\n

– Minimum 2 directors and 2 shareholders (can be the same 2 persons)
\n– At least one resident Indian director
\n– Registered office address in India
\n– MCA registration through SPICe+ form (Simplified Proforma for Incorporating Company Electronically)
\n– No minimum paid-up capital requirement (removed in 2015)<\/p>\n

Tax<\/a>ation<\/h2>\n

Pvt Ltd companies pay corporate tax<\/a>:
\n– 22% (plus surcharge 10% and cess 4%) under the new tax regime (Section 115BAA)
\n– 25% (plus surcharge and cess) for companies with turnover below Rs 400 crore under the old regime
\n– Effective tax rate: approximately 25.17% or 26%<\/p>\n

Pvt Ltd vs LLP vs Public Ltd<\/h2>\n

| Feature | Pvt Ltd | LLP | Public Ltd |
\n|———|———|—–|———–|
\n| Shareholders | 2-200 | Partners | Minimum 7 |
\n| Listing | No | No | Yes (if applicable) |
\n| Compliance | High | Moderate | Highest |
\n| Equity<\/a> fundraising | Yes (VC, PE) | Limited | Yes (IPO<\/a>) |<\/p>\n

Key Takeaways<\/h2>\n

– Pvt Ltd is the most popular structure for startups and growing businesses in India
\n– Separate legal entity with limited liability; cannot list on exchanges or offer shares to the public
\n– Minimum 2 directors and 2 shareholders; no minimum capital required
\n– Enables equity fundraising from VCs and angel investors through share issuance
\n– Higher compliance (annual filings, mandatory audit, board meetings) than partnership or LLP<\/p>\n","protected":false},"excerpt":{"rendered":"

A Private Limited Company (Pvt Ltd) is the most common form of incorporated business in India. It is a separate legal entity with limited liability for shareholders, restricted share transferability, and a minimum of 2 and maximum of 200 shareholders. It cannot offer shares to the general public. What Is a Private Limited Company? A […]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-14441","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"A Private Limited Company (Pvt Ltd) is the most common form of incorporated business in India. It is a separate legal entity with limited liability for shareholders, restricted share transferability, and a minimum of 2 and maximum of 200 shareholders. It cannot offer shares to the general public. What Is a Private Limited Company? A…","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14441","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14441\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=14441"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}