These companies are owned privately by a group of people to make profits and run their business in the market. According to The Companies Act, it should have a minimum 1 Lakh of paid-up share capital.
It is a distinct legal entity with all the shareholders having a limited liability i.e. their contribution in the company is limited to the amount of shares unpaid. The shares of a private limited company cannot be traded publically.
It is the most popular form of business in India as you just require a Certificate of Incorporation to initiate your business operations.
Limited Company is no different than a Public Company as they have the right to trade their shares in the general public. It is a voluntary association of its members incorporated under the Law (The Indian Companies Act, 1956) with a minimum paid-up share capital of Rs. 5 Lakh.
The sale of shares greatly contribute to the capital invested (share capital) in the company and the people who buy such shares are said to be the members of the company. The shareholders cannot contribute to the operations/management of the company.
Only the Board of Directors of the Company have the rights to make managerial decisions on behalf of other people. The operations of the company can only be windedup through Law which means that the business remains unaffected by death, insolvency or bankruptcy.