This document will describe you different type of business entities and their difference. It is very useful when setting up your firm. It is also useful for people preparing for exams like RBI Grade B /Assistant, Chartered Accountant (CA) or finance exams like CFA etc. Do visit xamnation.com for more detail on this subject.

1. Type of Business Entities
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2. Structure of Business Firm
Organization
Structure
Sole
Proprietorship
Partnership
Limited
Liability
Company
Private
Limited
Company
Public Limited
Company
Public Traded
/Listed
company
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3. • Owned by Single Person
• Unlimited liability of equity holder
• Limited funds
Sole
Proprietorship
• Owned by Two or more
• Unlimited liability of equity holder
• Limited funds
Partnership
• Liability is limited to equity
owners’ commitment to capital
• Private Limited Company
(closely held company)
• Public Limited Company
Limited
Liability
Company
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4. Private Limited
Company
Not allowed to invite public to
provide share capital
Minimum number of
shareholder – 2
Maximum – 50
Public Limited
Company
Share capital is contributed by
large number of individuals
Minimum number of
shareholder – 7
Maximum – no limit
Along with an individual, A body corporate, a partnership firm, a joint family or any
other entity can contribute risk capital to limited liability company
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5. Firm
Investors/Analysts
Management
Employees
Other Stakeholders
Government/Regulators
Citizens
Any issue, contact rakesh175@gmail.com
or call 8447688161