When starting a business in India, choosing the right type of company structure is crucial. Among the most common forms are Private Limited (Pvt Ltd) and Public Limited (Ltd) companies. While both are governed by the Companies Act, 2013, they differ significantly in ownership, compliance, fundraising ability, and public access.
In this article, we explain the key differences between Ltd and Pvt Ltd companies in India to help you make an informed decision.
? What is a Private Limited Company (Pvt Ltd)?
A Private Limited Company is a closely held business entity that restricts the transfer of its shares and limits the number of shareholders. It is the most preferred form for startups, MSMEs, and family-owned businesses in India due to its flexibility and limited compliance burden.
Key Features:
Minimum 2 and maximum 200 shareholders
Cannot raise funds from the public
Shares are not freely transferable
Requires at least 2 directors
Ends with the suffix “Private Limited”
? What is a Public Limited Company (Ltd)?
A Public Limited Company is a company that can raise capital from the public through the issuance of shares or debentures. It is suitable for large-scale businesses seeking funding from the market.
Key Features:
Minimum 7 shareholders (no maximum limit)
Can list shares on stock exchanges (after SEBI compliance)
Can raise funds via IPOs or private placements
Requires at least 3 directors
Ends with the suffix “Limited”
⚖️ Key Differences Between Ltd and Pvt Ltd Companies
| Feature | Private Limited (Pvt Ltd) | Public Limited (Ltd) |
|---|---|---|
| Minimum Shareholders | 2 | 7 |
| Maximum Shareholders | 200 | Unlimited |
| Public Fundraising | Not allowed | Allowed via IPO or stock exchange |
| Share Transferability | Restricted | Freely transferable |
| SEBI Regulations | Not applicable | Applicable (if listed) |
| Annual Compliance | Moderate | High and detailed |
| Statutory Meeting | Not mandatory | Mandatory for listed companies |
| Suitable For | Startups, MSMEs, family businesses | Large companies, public ventures |
| Name Suffix | Pvt Ltd | Ltd |
? Examples
Pvt Ltd: Flipkart Internet Pvt Ltd, Zomato Media Pvt Ltd (before listing)
Ltd: Tata Motors Ltd, Reliance Industries Ltd, Infosys Ltd
? Registration Differences
While both types of companies follow similar incorporation steps via the MCA portal (SPICe+ form), there are a few additional requirements for Ltd companies:
More compliance at incorporation
Higher paid-up capital (if planning IPO)
Appointing company secretary if listed
Filing with SEBI if shares are offered to public
✅ Which One Should You Choose?
Choose Private Limited Company if:
You are a startup or small business
You want to limit ownership to a few partners
You don’t need to raise funds from public investors
You want faster decision-making and fewer compliance requirements
Choose Public Limited Company if:
You plan to scale on a national or global level
You want to raise capital from the public or financial institutions
You are targeting an IPO in the future
You can handle more compliance and governance
? Conclusion
The choice between a Pvt Ltd and a Ltd company in India depends on your business goals, scale, and funding strategy. While Pvt Ltd companies are ideal for most startups and SMEs, Ltd companies are better suited for businesses seeking large-scale expansion and public investment.
Understanding these structural differences helps you stay compliant and aligned with your growth plans.
