Letís understand first what is company?
In simple terms, company means a group of some intelligent persons formed to start some business by taking prior permission from the government authority who register companies, in India Registrar of Companies has sole authority to register companies. The company has its own identity. It means that company is just like a person like you and me as a human being but it does not have its own body, therefore, it is said a company is a legal person which exist in the eye of Law. Company can perform the entire task as we human being do like company can purchase property, sign the documents etc
There are different kinds of companies which you can register in India to start your business ventures. Private Limited Company is one of the unique and popular forms of business structures among the foreign investors to form a subsidiary, joint venture or 100% owned.
Most of time, whenever you go to any corporate lawyers or consultants or advisors for seeking their advice, they will usually suggest you to start private limited company because of private limited companies provide certain distinct advantages over the other forms of business like Sole proprietorship/Partnership etc due to numerous reason including amongst the other reasons, the liability of shareholders in the private limited company is limited to the amount of shares held by them. It means that in case, a company is not able to pay its creditors, then personal properties of the shareholders shall not be used for the payment to creditors. I think as an investor you would always preferred to minimise your risk of being caught by regulators.