A Brief Guide To Open Ltd Company

A Brief Guide To Open Ltd Company

India, being a developing economy, has recently witnessed a rise in the number of startups across the country. Millennials, especially, are willing to start their own business instead of working on a 9 to 5 job as a way of contributing to the growing economy. There are various types of companies, LLPs, cooperatives, subsidiary companies opening up. One of the most preferred types is a limited company, an entity in which the liability distribution is limited.

Types Of Limited Company

There are three types of limited companies, which are as follows:

  • Private Limited Company- Most common type of business, having shareholders between 2 to 200. It cannot accept investments from the public. The company’s shareholders can be held liable only as per the number of shares an individual holds. Their name ends with ‘Private Limited.’
  • Public Limited Company- It is an entity listed on a stock exchange that can have 3 to 12 directors and at least seven members. These are large scale businesses, and their name ends with ‘Limited.’
  • One Person Company- These are companies with only one shareholder. However, it may have more than one director. The maximum share capital of an OPC is Rs. 50 lakhs and maximum turnover are Rs. 200 lakhs.

Advantages Of A Limited Company

To open LTD Company over the other types of businesses in India, businessmen should know its advantages, which are as follows:

  • In case a limited company runs into trouble, assets of its shareholders will be secure.
  • A limited company can have multiple owners. Hence, more capital and investment to contribute to the company’s growth.
  • It is easier for a Limited company to secure a loan.
  • A limited company has a more professional image, and it is easy for them to gain credibility.
  • Limited companies are referred to as a separate legal entity. Thus, they can enter into contracts with their own name.

If you are preparing to open LTD Company, take note that there are several uncertainties. Therefore, proper knowledge of legal matters is necessary. Do not take risks, reach out to professionals who are well aware of India company incorporation policies. 3E Accounting India has a perfect team to assist you in setting up your business and company registration process. Contact us via email or call to talk to our consultant to learn more about a limited company and choose which type is suitable for you.