Private Limited Company

Advantages of a Private Limited Company

Advantages of a Private Limited Company

Beginning a company is an exciting and gratifying process and these days, virtually everybody wants to operate a business. Selection of a corporate company is one of the essential choices before going into a business venture. This can be a proprietorship, corporation, joint corporation or private business. A good corporate model is private limited corporation.

A private limited company is a privately owned form of corporation. The establishment of a limited company helps the entrepreneur to keep separate their assets and finances from the business. One private limited company has many advantages:

  •  limited liability

A private corporation is viewed as a single entity i.e. the company is responsible for all the obligations and the related members are not directly liable if anything happens to the company. Responsibility for repayment of the company's debts and litigation rests with the client, and not with the lender.

 

  •  Tax Benifits

Some of the benefits of running a business as a private limited company is that you would potentially pay less tax than a regular trader. Small companies pay corporate tax on their taxable income and are excused from higher personal tax.

  • Separate legal body

There is a distinct presence of a private limited organization. The firm operates as a legal entity formed under the Act. A lawyer is a person who is neither normal nor human. The limited partnership functions as a single individual who is in possession of all the property and has the exclusive right to purchase, administer and disposal the property.A private limited company is separate from its members, it is not owned by its shareholders and stakeholders can not claim ownership of the company.

  •  Funding

Funding is vital to starting a company, growing and holding it the same. A company may need self-fund, associates, and family or debt and equity funds. Unlike ownerships, joint companies, and limited partnerships that can not issue shares, limited companies may issue shares and receive equity funding. As per company act 2013, a corporation can sell shares to the public or accept public deposits, and can raise capital more efficiently than other business structures.

  •  Share-transfer

Compared with the ownerships and partnerships, transfer of shares in a private limited company is easy. The company's shares tend to be movable property. It is easy to join or leave a company's membership, and pass ownership as well.

  • Authority to sue and investigate

A private limited corporation will bring legal action in court against a lawsuit. As an individual can bring legal action against another person, the corporation as a legal entity can also sue or be sued under its own name.

  •  Perpetual succession

A corporation has perpetual succession that is they enjoy permanent succession because the corporation is their own legal body. The company's shareholders and employees / members will not affect the function and sustainability of the business even if they leave. The firm is unaffected by any member 's death or departure, and the shares are distributed among other members. The business continues to exist and this is a very significant feature of a limited private companies.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

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