1. Higher Compliance Requirements

• Must comply with various provisions of the Companies Act, 2013
  
• Requires statutory audits, board meetings, annual filings, and record maintenance
  
• Non-compliance can lead to penalties, disqualification of directors, or even company strike-off
  

2. Greater Setup and Operational Costs

• Registration involves costs for government fees, legal services, and document preparation
  
• Ongoing expenses include accounting, filing, audit, and professional fees
  
• Costlier compared to sole proprietorships or partnerships
  

3. Limited Ownership Flexibility

• Shares cannot be freely transferred; subject to restrictions in the Articles of Association (AoA)
  
• Requires board or shareholder approval for new entries or transfers
  
• Not suitable for businesses that expect frequent ownership changes
  

4. Public Disclosure of Financials

• Required to file financial statements and returns with the Registrar of Companies (ROC)
  
• Certain company details become publicly accessible, reducing financial privacy
  
• May not be ideal for entrepreneurs who prefer confidentiality
  

5. Ineligibility for Public Listing

• Cannot raise capital from the general public through stock exchanges
  
• Fundraising is limited to private sources such as angel investors, VCs, or loans
  
• Growth options are constrained compared to a public limited company