Enterprises Vs Private Limited Company

There are many different words used for a business or an organization doing some economic activity such as company, establishment, firm, venture etc. The two concepts are very similar to each other prompting many to make use of these words interchangeably. Here we have explained the difference between enterprise and Private Limited Company.

What is an Enterprise?

A business (also called firm) is a legally recognized organizational entity designed to provide goods and/or services to consumers. An enterprise is a business and the ways it is formed i.e. Privately held, publicly held or Pvt Ltd Companies are different ways company chooses to distribute their stocks/shares.

What is the new & Revised definition of different categories of Enterprises?

The new definition of MSMe is as follows:

• Micro Enterprise:  Manufacturing and services enterprises with investments up to Rs 1 crore and turnover up to Rs 5 crore will be classified as micro enterprises.
• Small Enterprise: For small enterprises, the investment criteria and the turnover criteria has been revised upwards to Rs 10 crore and Rs 50 crore respectively.
• Medium Enterprise: The enterprises which have investment up to Rs 20 crore and turnover up to Rs 100 crore will be termed as medium enterprises.

What is a Private Limited Company?

A Pvt. Ltd. Co. by shares is a type of company. It has shareholders with limited liability and its shares may not be offered to the general public, unlike those of public limited companies.

• A Private Limited Company is a company that is privately held for small businesses.
• The liability of the members of a Private Limited Company is limited to the number of shares respectively held by them.
• Shares of Private Limited Company cannot be publicly traded.

What is the difference between Enterprise and Private Limited Company?

• While a company is typically an organization engaged in an economic activity for the purpose of earning profits for the stakeholders, an enterprise may not be a formal company in many instances.
• There are educational and community that do not fit into the definition of a company as they are not set up for the sole purpose of making profits.
• Enterprise is a word that can be used for a company though it is mostly used in the sense of action and growth as in private enterprise.
• Enterprise sounds more complex and interesting than company.
• It has become common in the context of IT these days with enterprise class and enterprise solutions being commonly used phrases.
• SME is an acronym that clearly indicates that it is meant to be used for ventures.

Also read: Difference between Public Limited and Private Limited Company