The right business entity provides multiple benefits to achieve business goals and ensure success. If you want your business to run seamlessly with minimum hassle, legalize your business by pvt ltd company registration in india. The most popular business entity type among business owners is known as a private limited company. It gains popularity due to multiple beneficial factors that help owners to hold the wide Indian market.
When it comes to choosing a business entity type, most people prefer private limited companies over other entities. If you want your business to make an identity in the market and get enough opportunities to expand, register your business with a private limited structure. This is the best way to structure your company and acquire numerous benefits. In this blog, we shall discuss the beneficial factors of Pvt ltd company registration.
- Limited liability: The foremost benefit of incorporating private limited companies is limited liabilities. In other proprietorships and partnership firms, if the company faces losses or bankruptcy the partners are liable to pay the obligations. Even the partners have to sell personal assets to cover the shortfall. But a private limited company does not ask the shareholders and directors to pay for any unanticipated financial crisis. Hence, their assets are safe and the only thing they will lose is the initial investment. Private limited companies provide limited liabilities that protect the private properties of directors and partners.
- Access to finances: The benefit of limited liability attracts investors to invest in private limited companies. Most popular brands and industrial monopolies are in incorporation with private limited companies. And this quality of potential growth and success in the national and international market makes it an obvious choice for investors. Even, though it is considered an ideal choice for startups to gain easy investments from potential investors. If you are running a small or medium business and want access to finances, register your business with a Pvt Ltd company.
- Preferred by banks and financial institutions: Your business requires money to achieve ultimate goals and recognition in the market. Most companies prefer lending money from banks and financial institutions. But the banks demand legal registration to sanction loans to a company. When your business is registered with a private limited company, lending loans from banks and financial institutions becomes easy.
Banks prefer private limited companies as they are registered under the Ministry of corporate affairs. Even, the registration process is governed by the Companies Act 2013 and the Company Incorporation Rules 2014. Along with these Acts, several Acts make a private limited company more trustable, such as Income Tax Act, Trademark Act, GST Act, SEBI Act, Names and Emblems Act and so on.
- Perpetual existence: In the eyes of law, the identity of a Pvt Ltd Company and its owners consider separate. This indicates that a private limited company does not end after the death of the owner. Even, if any of the shareholders resigns, retires, is removed, or is proven guilty, the company will continue. Hence, the ownership will be transferred to new owners as the company can have a maximum of 200 shareholders.
And the perpetual existence will continue even after the death or departure of a proprietor or partner. Thus, the private limited company ensures its indefinite existence. Among the several beneficial factors, this factor makes Pvt Ltd Companies an obvious choice.
- Low-Income tax: One of the prime beneficial factors of private limited company registration is the low-income tax. As per Section 80IAC of the Income Tax Ac, startup businesses registered as Pvt Ltd Companies do not have to pay income tax for three consecutive financial years.
Since a startup requires a little time to create its name in the market, three years of tax holidays are a boon for them. Thus, the burden of legal and tax compliance reduces and provides adequate time to grow in the market. If you are planning a startup, private limited company registration can bring the most significant benefit of tax holidays your way.
- Easy to incorporate: In the digital era, the company registration process has come online to make the procedure easy. This means you can submit the registration form to incorporate in a private limited company from anywhere at any time. Online registration facility reduces the paperwork, time and money to incorporate your business with a business structure.
- Seamless transferability of shares: Another beneficial factor of private limited company registration is its seamless transferability of shares. As per the Pvt Ltd Company registration rules, a minimum of two shareholders are required to become eligible for incorporation. And a maximum of 200 shareholders can become a part of the business with time.
Even the owners and the shareholders can sell or transfer their shares anytime to anyone. The seamless transferability of shares makes a private limited company a must-registered business structure. Therefore, individuals connected with the company are not liable for any condition and can exit at any moment.
- Expanding internationally: What can be better than establishing partnerships with foreign companies? A private limited firm registration provides the opportunity to take your business overseas. It allows an automatic method for FDI of up to 100%. No need to acquire government approval for foreign corporations to invest in your company. Hence, private limited company registration can be beneficial for your business to expand internationally. If you want your business to run in the international market, no other business structure can provide more benefits than a private limited company registration.
Conclusion: Most entrepreneurs find the structure of a private limited company more reliable than other business models. It can provide growth and long-term benefits to its owners and shareholders. It even protects the private assets of the directors and shareholders in unexpected financial crises.
If you are confused about what business structure will be right for your startup, read the mentioned beneficial factors again for assurance on private limited companies. You can submit the online registration form for a hassle-free experience. A register private limited company in india can gain huge success in the national market as well as internationally.
