A Private Limited Company (or a Pvt. Ltd) is the most popular form of corporate entity to be registered in India. A Private Limited Company can be incorporated with a minimum of two Directors (Individuals only) and two Shareholders (Individuals or Corporate entities). Both Directors and Shareholders may or may not be the same person.
A Private Limited Company is preferred for starting a new business due to features like Limited Liability i.e. limiting the liability of Shareholders only upto the amount invested in the Company, having a Separate legal entity which is distinct from its members and directors, hence the Assets and the Liabilities of the company are its own and not of directors or Shareholders, and also the ability to raise funds by allocating Equity shares of the Company. NRI’s or foreign nationals can also be Directors and/or Shareholders in a company and can invest in India through a Private limited company, hence a preferred mode of starting business in India.