Why to go for a Private Limited Company?
One of the most important question that arises while incorporating a business entity and choosing amongst the various business entities. It is really a difficult task to opt for an entity that is perfectly suitable for your business to earn well in the highly competitive market. So, here is the article describing about private limited company benefits.
Procedure of Private Limited Company Registration,
In my opinion, being the EAdvisors consultant, I would highly consult to go for a Private Limited Company if you have less of resources and finances. Private Limited Company is highly in demand and here are the benefits proving it all.
Continue reading it to get convinced for incorporating a Private Limited Company.
Benefits
- Limited Liability
In a Private Limited Company, the liability of the members in respect of the company’s debt is limited only to the extent of the face value of shares taken up by the members. It simply means, that in a private limited company the members enjoy various benefits of “limited liability” and are not responsible to pay for any of the business loss.
- Tax Efficient
Various corporate tax reliefs are provided under the Private Limited Company. The Income Tax rate has been reduced for private limited companies. Also, private limited companies pay less than the normal regular trader.
- Separate Legal Entity
A company is an artificial person separate from its members. Being a separate legal entity, it can own property in its own name. It has its own identity and very recognized as a separate company under the law. It is an entity registered under the Act and is legally into existence.
- Easier to Raise Capital
Private Limited Company is very known as they attract investors which helps to raise capital for the company. Private Limited Companies can easily raise capital as they have high credibility. Raising capital for a business is not an easy task, but in the case of a Private Limited Company, its easy. Yes, you heard it right.
- Easier to Maintain
With the launch of new software in the market, managing the company’s work has become a piece of cake. Online and automatic software has made maintaining the finances of the company extremely easy. Who wants to get burdened with work? I guess, no one. And that is the reason why Private Limited Companies are in huge demand and are being incorporated every day or the other.
- Easy Management Structure
Having less of resources and money in hand, like for sole traders and small business owners, a “Private Limited Company” seems the best option. In the Private Limited Company, the control shall be limited to small group of persons which also means the security of information of the ongoing of the company. With the easy and flexible management structure.
- Uninterrupted existence
A company is in existence by the law and can be dissolved under the law which means no individual has the power or the authority to shut the company unless it is legally dissolved. Neither the death of a person, nor the departure of the members of a private limited company can dissolve the company.
- Capacity to sue and be sued
A Private Limited Company, being a separate legal entity has full rights to file a case against any individual or any other company. As a company, it can also be sued by any other company.
- Dual Relationship
A Private Limited Company allows a person to be in control of a company and also at the same time be in its employment. So, to enjoy being a shareholder and also the creditor of the company, you can definitely go for incorporating a Private Limited Company.
- Borrowing Capacity
And yet the most important and likable benefit of a private limited company i.e. a Private Limited Company enjoys better avenues for borrowing funds. Private Limited Companies are allowed to issue secured as well as unsecured debentures, and also deposits from the public. And that’s the prime reason why most of the reputed banks and other financial institutions prefer to grant loans to a private limited company rather than giving them to sole proprietorship and partnership firms.
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