5 Outstanding Benefits of Private Limited Company Registration

Due to increased unemployment in India, more and more people are taking steps towards starting their own business. And for the same reason, the number of company registration is increasing continuously every year. If we believe the studies, Private Limited Company is found to be one of the most popular choices of most of the starting entrepreneurs and hence, it's the most common type of company registration in India. 

Without stretching any more, let's first understand the actual meaning of Private Limited Company Registration and then we will learn what benefits it can offer to starters and entrepreneurs. So let's get started-

What is a Private Limited Company Registration? 

Company registration process that requires a minimum of two shareholders or directors and is governed by the Companies Act, 2013 and the Companies Incorporation Rules, 2014 is generally known as Private limited company registration. 

Requirements for Private limited company registration

• Minimum of two and maximum of 15 directors above the age of 18 years.
• One of the two directors need to be an Indian citizen and must have own resident in India, while the other can be a foreigner. 
• At least two persons are supposed to act as the shareholders of the company. Shareholders can be either a natural person or an artificial legal entity. 

Company Registration

Benefits of Private Limited Company Registration

The Private Limited Company Registration has numerous benefits to offer to business owners and industry professionals. You can find some of the top 5 benefits of the same described below:

Limited liability to members and directors of the company

Members and directors of the Private Limited Company have the limited liability to the amount of shares. It means if the company suffers loss due to any circumstances, then the personal assets of shareholders/directors/members won't be at risk to be ceased by any legal authorities be it banks, creditors, and government. 

The higher scope of expansion

Because with the Private Limited Company, it is easy to raise Venture Capital Fund, therefore, the scope of business expansion is quite high. 

Increased brand value 

If you compare it with Sole Proprietorship, then you will find that Private Limited Company offers more value to the business as it possesses a separate legal entity managing affairs on its own name. 

Long-term existence

Even after the death of the shareholder, the company will continue to exist as it isn't affected by the status of the shareholders. 

High valuation and more loyal customers

Such companies have a better business model, and hence, their customers have higher lifetime value. 

Wrapping up

Private Limited Company is one of the most sought and popular business structures in India. After the company registration, one can easily raise funds from investors. Moreover, the operations of the Private Limited Company Registration are more organized as compared to that of LLP/OPC.

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