📖 Types of Companies under Companies Act, 2013
India’s business landscape is governed by the Companies Act, 2013, which lays down detailed provisions for the formation, operation, and management of companies. Whether you’re a startup founder, professional consultant, or business owner, understanding the different types of companies recognized under Indian law is crucial for selecting the right structure for your venture.
In this article, we’ll explain the various types of companies under the Companies Act, 2013, along with their features and benefits.
📌 1️⃣ Private Limited Company (Pvt. Ltd.)
A Private Limited Company is the most popular form of business in India for startups and small to medium enterprises.
Key Features:
- Minimum 2 and maximum 200 members.
- Restriction on share transfer.
- Cannot invite the public to subscribe to its shares.
- Mandatory use of ‘Private Limited’ in the name.
Benefits:
Limited liability protection, separate legal entity status, easier fundraising.
📌 2️⃣ Public Limited Company
A Public Limited Company can offer its shares to the general public and is ideal for businesses aiming for large-scale operations and capital raising.
Key Features:
- Minimum 7 members with no upper limit.
- Can invite public to buy shares or debentures.
- Must use ‘Limited’ in the name.
Benefits:
Access to capital markets, easy fundraising from public investors, separate legal identity.
📌 3️⃣ One Person Company (OPC)
Introduced in the Companies Act, 2013, an OPC is suitable for solo entrepreneurs who wish to enjoy the benefits of a corporate structure.
Key Features:
- Only one shareholder.
- Must appoint a nominee.
- Limited liability for the sole member.
- Separate legal entity.
Benefits:
Ideal for single founders, minimal compliance, limited liability protection.
📌 4️⃣ Limited Liability Partnership (LLP)
A hybrid between a partnership firm and a company, LLP is governed under the LLP Act, 2008 and certain provisions of the Companies Act.
Key Features:
- Minimum 2 partners.
- Limited liability for all partners.
- Separate legal entity.
- No minimum capital requirement.
Benefits:
Operational flexibility, lower compliance burden, and limited liability.
📌 5️⃣ Section 8 Company (Non-Profit Organization)
A Section 8 Company is formed for charitable, educational, social, or welfare objectives, without the intent to distribute profits.
Key Features:
- No dividend distribution.
- Profits to be reinvested for the promotion of its objectives.
- Requires prior approval from the Central Government for registration.
Benefits:
Tax exemptions, credibility for donations, and social welfare recognition.
📌 6️⃣ Producer Company
Aimed at empowering farmers and agricultural producers, a Producer Company operates as a corporate body with benefits like limited liability and governance structures.
Key Features:
- Minimum 10 individual producers or 2 producer institutions.
- Works for mutual assistance among members.
- Deals primarily with the production, harvesting, procurement, and sale of primary produce.
Benefits:
Limited liability, tax benefits, government subsidies.
📌 7️⃣ Small Company
A Small Company is a classification based on capital and turnover, providing compliance relief to eligible businesses.
Key Features (as per latest amendment):
- Paid-up capital not exceeding ₹4 crore.
- Turnover not exceeding ₹40 crore.
- No public company or holding/subsidiary company.
Benefits:
Lower filing fees, lesser compliance burden, no need for cash flow statements.
📌 Conclusion
The Companies Act, 2013 provides multiple company structures to suit various business requirements, sizes, and operational scopes. Whether it’s a Private Limited Company for startups, a Section 8 Company for non-profits, or an LLP for professionals, choosing the right entity is crucial for legal protection, tax efficiency, and smooth operations.
If you’re planning to register a company or need help with ROC filings and compliances, feel free to consult our experts at GST Suvidha Centre.