How many directors and shareholders are requried to form a company | Best company formation

In 2025, starting a company in India is more accessible than ever, but understanding the requirements for directors and shareholders is crucial to ensure compliance with the Companies Act. To form a private limited company, you need a minimum of two directors and two shareholders, but there’s no upper limit on the number of shareholders. The directors must be individuals, and at least one of them should be a resident of India, meaning they must have lived in India for at least 182 days during the preceding year.

As for shareholders, they can be individuals or other companies, and there is no restriction on foreign shareholders. This flexibility allows businesses to have a diverse group of investors, including foreign entities, which is beneficial for expansion and growth. For public companies, a higher requirement applies: at least three directors and seven shareholders are needed.

In 2025, the process of registering a company has become increasingly streamlined thanks to digital platforms and government initiatives aimed at promoting ease of doing business. With the incorporation process now being faster and more efficient, entrepreneurs can focus on their business goals while ensuring all legal formalities are correctly handled.

Whether you’re setting up a private limited or public company, it’s vital to adhere to the legal structure and formalities. At eAuditor Office, we provide expert guidance and services in company formation, accounting, tax filings, and auditing to ensure smooth and hassle-free operations. Contact eAuditor Office, the best auditor office in India, to get started on your business journey today!

Sathish Ramalingam | eAuditor Office | Virtual CFO | Fractional CFO | Best Auditor

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