Have you already embarked on a journey to become a successful entrepreneur? If it is so, then you should consider registering your company as a private limited company in the very first place. If you are already done with that vital process, congratulations. If you haven’t registered your company yet, enrich yourself with some information about pvt ltd company registration benefits. This article will focus more on the advantage of registering your company as a private limited company rather than the general registration procedure. Hang in there till the last section of the article and you won’t regret it as this article is going to enlighten you to make the path of your journey of becoming a successful entrepreneur more solidified.
What do you mean by a Private Limited Company?
Before you venture into the process of a Private company formation, you need to have some basic ideas regarding what connotes a private limited company. A private limited company is a business entity where all the shares of the company are privately-held. The extent of a private limited company is limited and for that reason, the maximum number of shareholders in a private limited company should not exceed 200. Being an entity of a limited capability, a private limited company enjoys such benefits that a public enterprise cannot even think of. Here is how the advantages of a private limited company are enjoyed by its shareholders.
Pvt Ltd company registration benefits
The concept of a private limited company is a very old school and nearly 93% of business companies in India are entitled as a private limited company. Have you ever given it a thought why so many people are preferring Private limited company registration? A private limited company restricts the liability of its stakeholder only up to the amount of Share Capital subscribed by them and it restricts the shareholders to trade their shares publicly. These technical jargons are alien to the people who have recently stepped into this field to start a business. Now the question that strikes first in their mind is why private limited company? Why not a sole proprietorship or other avenues?
A Private limited company formation requires a minimum of two members as its shareholders to start a business. Don’t you think that having a partner in your business always facilitates your work? If your partner has information about areas that you are not familiar with, he might play the role of a complementary partner to make your business successful. The pvt ltd company registration benefits would be felt only when the sphere of ideas will expand and who knows your partner may bring in more clients to kick start the boost that you are looking for in your business. Another advantage is that not just an individual but a corporate body can also become a stakeholder in a private limited company.
A private limited company registration brings with it the feature of limited liability. If you find it difficult to understand the concept of limited liability, follow this explanation minutely. It is assumed that this idea of limited liability can prove to be an X factor in your business and may help you to turn the table. If you are the sole proprietor of your business and take a huge loan for your business the onus of returning it is solely on you. God forbid, if, in any case, you are unable to pay back the loans, you have to deposit your assets being a defaulter. The partnership model is no different. At this point, the pvt ltd company registration benefits come into the forefront. If the company faces any kind of loss and depletion, the share holders are responsile only upto the unpaid amount subscribed by them s. So, the solitary assets of shareholders are not on the verge of any risk. Registering your company as a private limited company, would whittle down the risk involved in other cases.
A private limited company, being a separate legal entity, would continue to exist even if some shareholders of the company are deceased or in case of bankruptcy and insolvency. This is another significant benefit of private limited company. As in the eyes of law, the life of your company does not depend on the life of any of its members and it goes on to continue with perpetual succession.
No Minimum Capital
There is no minimum paid up share capital requirement under the law. A Private Company can be incorporated with minimum two rupees being the Authorized and Paid-up Share Capital.
The particulars of the company are available on a public database. Which improves the credibility of the company as it makes it easy to authenticate the details
A Company formation in India will automatically attract tax liabilities and the taxes must be paid on time according to the government rule and prescribed tax slabs. But as most of the private limited company emerges as a small business entity, many benefits and advantages regarding taxes can be availed if the company is registered. The company can avoid double taxation if it is registered under the Companies Act, 2013. So, in any case, company registration is a must if you want to maintain a sustainable business structure in your organization.