What are the Advantages of Incorporating a Private Limited Company?

  • August 16, 2018
  • Dushyant Sharma
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Private Limited Company is one of the most popular business entities in India, and there is a significant reason for that. Ever since the inception of Start-up India initiative, there has been an absolute influx in start-ups in the country and this is the sort of business entity that they are looking for

The applications of private limited company registration  are so many that many have started to wonder- Is there a herd mentality associated with this?

The answer is no! There are certain advantages of a Private Limited Company that makes this business entity so alluring to start-ups and even veteran businessmen.

Advantages of a Private Limited Company Registration

  1. This company is a separate legal entity from its owner: once you incorporate your company as a private limited, you have a separate legal entity in your hands. This entity is a complete separate from the owner. As it has a distinctive existence, you can say that a company is its own person. To that end, it has some legal rights that mirror that to a person. This separation allows the owners of such a company to be relieved from any sort of debt that is associated with the company.
  2. The Private Limited Company can exist without any sort of interruption: Once the company has been setup, it is going to exist forever. It is because the company is itself is a legal person that cannot be affected by the death of its owner. This perpetual succession is one of the most interesting features and benefits of such a company.
  3. Limited Liability: The owners of a Private Limited company enjoy the rights of Limited Liability. That means that the owners are only liable to a particular limit of debts associated with the company. To that end, the only part of debt that the owners are responsible for is the amount of shares that they have invested.
  4. Being a separate legal entity, a company also has the right to acquire property: When it comes down to it, being a separate legal entity will grant you the rights of a person. The same goes for a company. Being a separate entity, the can own property. Furthermore, if the company owns a property, the shareholders hold a claim to that property.
  5. Easy access to loans: For a Private Limited Company, it is easy to access loans. Many large financial institutions including banks can provide a large amount of loans to these companies.
  6. A private Limited company helps establish a dual relationship with the owner:  Once you are the owner of a company, you can also be in its employment. You can be the shareholder, the creditor or director of that company, but can still be its employee. This duality makes a company one of the most versatile forms of business entities in existence.

These are just some of the advantages of a private Limited company. Knowledge comes with experience. To that end, if you want to know more about it, why not incorporating your own company as one?

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Dushyant Sharma
Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.

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