What Are the Advantages of a Private Limited Company?

Business

In modern times there are several different types of business structure. Private limited business is one of the types of business structure which is usually for small businesses and is owned privately by a person or a group of partners. The growth in the popularity of private limited companies is due to several reasons. The number of shareholders of a private limited company is limited to fifty. The liabilities of the owner to their shares are also limited when it comes to a private limited company.

This kind of business structure also restricts the shareholders from publicly trading shares. This kind of business has become a pretty prevalent one in the present times.  The private limited structure of business has a vast array of benefits or advantages. You will get to know about the various benefits of a private limited company.

Advantages of a Private Limited Company

1) Uninterrupted Existence

A private limited company will not dissolve with the death or the resignation of the owner. The company will be incorporated, and then it becomes a legal entity. The business will have a natural continuation even when the owner is not there.

2) Separate Legal Entity

A private limited company is a separate legal entity, and it is like a juristic person. A juristic person is such a person who is not truly a human being or a person. However, the company will be treated legally as a separate being.

3) Free & Easy Shares Transferability

In a private limited company, the transfer of the shares is easy and free in nature. This is one of the best aspects of a private limited company. The shares of the company are limited from the shareholders from publicly trading shares.

4) Limited Liability

The personal liability of the owner of a private limited company is limited. The owner is responsible for a limited amount of the company’s debts. This is a big relief when it comes to a private limited company.

5) Capacity to Sue and Be Sued

Since the company is a juristic person and is treated as a separate legal entity under the court of law, it can be sued or has the capacity to sue. The company can sue any other person by its own name. On the other hand, it will be sued on its name only.

6) Owning Property

Owning a property is another beneficial aspect when it comes to a private limited company. This is because it is considered as a juristic person. This enables the company to have a property bought on its name.

7) Borrowing Capacity

Since the company has its own name and is a separate legal entity, the company is treated as a juristic person. This enables the company to lend money and funds. The borrowing capacity is bettered. This is another benefit of private limited companies.

8) Significantly Less Paperwork

In a private limited company, the amount of paperwork is significantly less. This is a beneficial aspect when it comes to others. The paperwork is a lot less, and this makes the stress less as well. There is no requirement for arranging and storing these papers as well.

9) Easy Registration Process

The registration process of a private limited company is also easy and straightforward. The company registration process of a private limited company is one of the easiest among the various types of businesses in the modern marketplace.

These are the various benefits that you can avail from the business structure of a private limited company. You can have all these advantages when you start a private limited company, and these are the reasons as to why this kind of a business structure has become so popular in modern times.

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