Legal

Private Limited Company

The most common company structure for Indian startups. The company is legally separate from its founders, so business debts stay with the business, and it can issue shares to investors.

Example

Most startups that raise funding register as a Pvt Ltd because investors can only buy shares in a company, not in a sole proprietorship.

Related terms

Cap Table

A list of everyone who owns a piece of the company — founders, investors, employees with options — and how much each holds.

LLP

A business structure where partners share ownership but are not personally responsible for the business debts. Cheaper to run than a company, but you cannot issue shares to investors.

Incorporation

The legal act of registering your business with the government so it exists as its own entity. Until you incorporate, you and the business are the same thing in the eyes of the law.

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