Having a Private Limited Company is the best way to start a business because it has fewer restrictions and offers shareholders the power of limited liability. For private limited company registration, there is a need for a minimum of 2 members and a maximum of 200 members.
It is a type of business entity in which shareholders can run the company by themselves or hire directors to manage its functions.For starting a private limited company, you have to follow the process of company incorporation.
Benefits of a private limited company
Exemption from Taxes
In a Private Limited Company, income is not the source of taxes. Taxes are paid on the profits. In this way, this company has less burden of taxes in comparison with other business structures.
According to the Companies Act of 2013, a person having a private limited company comes under some legal provisions which help people trust them and thus help the company grow more.
The Pvt. Ltd. company has a feature that it is separate from its members. It means that even after the death of its members, the company will remain in existence and it will operate its functions, and the absence of the members will not affect its functioning.
The Private Limited Company is a form of business structure because, from small businesses to large businesses, everyone can easily do private limited registration online on the official portal.
The Private Limited Company provides legal protection to businesses as each business will have its unique name under it. And after business name registration, no other business can copy it, which makes your business unique and increases the trust of customers and investors.
In private limited companies, the liability of the members is limited. And they will be responsible only to the extent of their contribution in the company, and their personal assets get saved.
The businesses, whether it’s small or large, when they have registered themselves as a private limited company, they are free to start foreign trade. It means they can expand their business globally and they can deal with international clients freely.
Separate Legal Entity
In the absence of the members of the company, there will be no effect in the private limited company because it is a separate legal entity. It means that it has the ability to buy any property or other assets, it can itself sue someone or it can be sued, and enter into contracts.
In conclusion, establishing a Private Limited Company offers several advantages for entrepreneurs and businesses. This business structure provides limited liability to its shareholders, meaning their personal assets are safeguarded in case of company debts or legal issues. Private Limited Companies enjoy tax exemptions on their income, making them a financially efficient choice. They also benefit from legal protection with a unique company name, fostering trust among customers and investors.