Exploring the benefits of registering a Pvt. Ltd. Company in India

A private limited company is an entity in which the owners hold the shares of the company. In India, “The Company Act, 2013” governs the registration and operation of a Pvt. Ltd. company. Private Limited Company registration in India can be identified as having significant benefits for both the company and the board. This blog will discuss the benefits associated with the Pvt. Ltd. Company registration. 

• Separate legal Entity:

A pivotal benefit of registering for a private company is that it has a separate legal entity. Post Registration, a private company becomes a separate entity. Hence, it can take properties in its name, conduct business, get licenses, and be free from the owner’s reputation. The company can conduct transactions under its own name and can also enter into contracts.

• Limited Liability: 

Before registration, the company may be operating as a proprietorship or a firm, in which the owners may have their liability to the extent of loss. But post registration their liability becomes restricted to their share in the business. Any loss to the business is to be recovered by selling the company assets rather than involving the owner’s assets. 

• Perpetual Succession:

Post Registration, the pvt. Ltd. company has a perpetual succession, which means that the company's existence is not affected by its owners. Whether an owner leaves the company or a new member joins the board, the company will continue to work until it is legally dissolved. 

• Growth and Funding Access:

A Pvt. Ltd. company can raise funds under the name of the company. Also, post registration it gets certain legal rights and recognition, that support business growth. For instance, the Indian government has announced several schemes and subsidies for companies involved in global trade. Hence, post registration, such schemes can be utilized to ensure business growth. 

• Easy transferability of shares:

After private limited company registration in India, it becomes a separate entity, and the owners become the shareholders. Hence, the ownership can easily be transferred through the transfer of shares from one person to another. Such allows an easy exit and further easy transferability of shares. 

• Improved Credibility:

In the process of company registration, the owners are required to submit several documents to the registrar of companies. Such documents are properly verified and based on such the company registration is approved. Also, in the registration process, a CA plays an important role in evaluating and justifying your firm’s financial position in the industry. Hence, such results in improved business credibility and also attracts investors' attention in the industry. 

Final Words

Registering your company as a private limited company can have potential benefits. Such benefits can be utilized to ensure your business growth and expansion in the long run. However, to know more about the process, the documents required, and the benefits associated you must interact with a leading CA firm or accounting service provider. They can help you understand the process and to get your business registered effortlessly.