The private limited Company benefits from both the corporation and partnership structures. Thus, there are many privileges or benefits of Private Limited Company Registration. This article will give you all the key points of Private Limited Company and help you understand the privileges of Private Limited Company Registration.
What is a Private Limited Company?
When starting a company in India, a private limited company is one of the best options since it provides protection from personal responsibility and specifies the maximum amount of ownership that one person may have in the firm. Because it allows for quicker and easier access to capital from outside investors, Private Limited Company Registration quickly becomes the go-to for new businesses.
A private limited company is a business structure used mostly by micro- and medium-sized companies (SMEs). Investors are only liable to the extent of their shareholdings, the corporation can have no more than 200 shareholders, and the same individual can serve as both a director and a shareholder.
It’s a way to incorporate a business that establishes the entity’s separate legal existence from that of its managers and stockholders. Therefore, essential services such as contracting in its name and shielding the owner’s personal assets from business liabilities are made available.
Prerequisites to get Private Limited Company Registration
- Six Proposed Company Name
- Objects of proposed company
- Details of All directors
- Passport size Photo (JPEG)
- Copy of PAN card
- Address proof and
- Identity Proof
- Address proof for company registered office
- Latest electricity or any other utility bill in the name of owner
- NOC from Owner
Know about the Privileges of Private Limited Company Registration
Shareholders have a Limited Liability
Shareholders in a private limited company are protected from having their personal assets liquidated in the event of a business failure due to unanticipated financial difficulties. The Director would lose just what he or she initially put into the company, and his or her other possessions would remain unaffected.
Easier to Get Funding
It is simple for private limited firms to accept equity capital due to the separation of powers and the protection from personal liability enjoyed by the company’s directors and stockholders. In reality, VC and PE firms are unlikely to back any other organizational structure. This is so because in LLPs, they would have to take on the role of partners, but with an OPC, there can be only one director or shareholder.
Easier to form
In contrast to registering a partnership or forming a limited liability partnership (LLP), forming a private limited company takes significantly less time.
Better Borrowing Capacity
Compared to LLPs, private limited companies have more leeway in the form of debt financing alternatives, allowing them to borrow large amounts of money. When compared to OPCs and LLPs, bank loans are far less difficult to secure, and debentures and convertible debentures are always a viable choice. Private limited businesses are more often accepted by financial organizations like banks than partnerships.
In Conclusion, Private Limited Company enjoys a lot of privileges. If you are aiming to create a new business, Private Limited Company Registration might suit your needs. For free consultation, you can contact our business experts at: 8881-069-069.
Also, require any other guidance with respect to Company Formation, please feel free to contact our business advisors at 8881-069-069.
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