There are several kinds of reasons why people go with the option of launching their private limited companies and the most important one among all of them is the limited liability provided by such companies. A private limited company is considered to be the simplest and the most popular form of business registration in India and it can even be registered with a minimum of two people.
Following are some of the very basic advantages associated with the Private Limited registration of the companies in India:
- There won’t be any kind of requirement of the minimum capital because any of the private limited company can even be registered as a mere sum of Rs.10,000 as the total authorised share capital.
- The private limited companies will always have a separate legal entity in the eyes of the law which means that assets and abilities of the business will not be considered as the same of the promoters of the directors. Both of them will be counted as different. The Private Limited Company will be having separate management as well as ownership which is the main reason that managers will be responsible for the success of the company and will also be answerable for the loss of the company.
- The Private Limited registration will always help in making sure that even if a company undergoes financial distress because of whatsoever reasons the personal assets of the members will never be used in paying off the debts of the company because the liability of the concerned people will always be limited. Hence, there will be a high level of safety and security to the personal assets of the people who are promoting the company.
- Whenever a company will be registered under the rules and regulations of India it will be successful in terms of raising funds from venture capitalists or angel investors because it will be adding a great amount of value to its reputation in the market.
- A company that is registered can even go with the option of dealing with free and easy transfer of shares because shares will be transferable by the shareholder to any of the person. The transferability will always help in making sure that the overall process will become very easy and organisations can have proper access to the right kind of capital structures.
- There will be uninterrupted existence for the organisations because they come with a perpetual succession feature until and unless the company has been legally dissolved. The company will always be considered to be a separate legal person in the eyes of the law and it will remain unaffected by the death or departure of any of the member. Perpetual succession is one of the most important advantages provided by the registration of the companies to the concerned people.
- In the cases of the private limited company, a hundred per cent foreign direct investment will also be allowed which means that any of the foreign entity can indirectly invest into that particular company which is only possible after registration.
Hence, indulging in private LTD registration is a great idea to have all the above-mentioned advantages very easily.