Now, let’s discuss some of the benefits in detail;
- Limited Liability
The responsibility of the members of a private limited company is restricted to their share only as the private limited company is a separate legal entity.
- Separate Legal Entity
A private limited company is a separate legal entity which posses all the rights to sue or to be sued. It acts an artificial person which can buy a property on its own name.
- Credit Availability
A private limited company can obtain funds from the debentures as well as the stockholders. Registered Private limited company is considered as a corporate entity that attracts various angel investors and venture capitalists that helps them to expand and raise their funds for the growth of their business.
- Perform Internationally
The private limited companies supports Foreign Direct Investment in which other type of firms requires appropriate licensing and approval from the administration for foreign investments.
- Perpetual Existence
A private limited company has a lifelong existence. Private limited companies are considered as separate legal entities and are separate from the existence of their owners. It means they cannot be dissolved or end because of the death, retirement or insanity of any of their member/ director/ shareholder.
- Enhanced Value In Market
A registered private limited company is considered more trustworthy as compared to the non-registered ones. Information regarding the registration of private limited company can easily be obtained from the website of Ministry of Corporate Affairs. Vendors, suppliers and investors trust them over the other business structures. As a result, it enhances the brand value of the company amongst the customers and other investors and suppliers.
- Ease In Transfer Of Ownership
It is quite easy to transfer equity to new members and issue fresh shares in private company.