Starting up of a business is the most interesting experiences of one’s life. When you start up a business, you must choose the right kind of business structure. Great businesses are a product of great teams. Success in business is determined by the ability to build great teamwork. Today, employees are looking for a high salary. Therefore, it is important for any business today to have the option of providing stock ownership to employees. Private Ltd is a fine business model for start- ups as. Private limited companies transfer limited financial liability on the members of the company as compared to other businesses. Financial liability is a key benefit of forming a Private limited company in India. It never put you at the danger of any personal bankruptcy problem in the happening of your business failure.
Here Filing Bazaar team guides you for choosing the best right kind of business structure and help you for Private limited company registration, LLP registration etc.
Most companies in India are incorporated as private limited companies:
There are 7 Reasons for entrepreneur who opts for a Private Limited Company.
1. Closely held
As all the stock of Private Company is concentrated in the hands of a few individuals, it mitigates the risk of intrusion of an unknown. Even the shareholders are restricted to some extent from selling the stakes of the company to a person who is not a member of the company, without offering them to existing shareholders or members.
2. Improve Business Credibility
In starting a private limited company, the information relating to the company, such as name of the company, date of incorporation, registered office address, status of the company, and other information are made available in a publicly searchable database. This feature makes it easy to authenticate the existence of the business, improving business credibility.
3. Going large-scale
The private limited registration brings foreign investors and companies an excellent opportunity to invest in the company with no governmental approval. It makes the process simpler for entrepreneurs to go international. It is essential for all new business entrepreneurs to have this unique feature for allowing both collaborations and FDI with global businesses.
4. True Owner:
A company is a juristic person and its actual owner. No member of a company can claims the properties owned by the company as its own as long as it is a going concern. Although if the company is dissolved the assets are to be distributed amongst the shareholders after the creditors of the company are paid off.
5. High Value:
A private limited company hold high credibility in the national and international market and hence most foreign companies incorporated in India are private limited companies. This is because they receive financial help easily as compared to other types of companies formed.
6. Related Party Transactions:
Private limited companies enjoy more relaxations over compared to public limited companies in related party transactions as most of the deals in private limited company is within the close network of directors or promoters.
In Private companies, the scope of development is easy as the fundraising can easily be done by receiving funds from its members, directors only. The bank also gives high value to private companies and sanction Loans accordingly.
That’s why we the Filing Bazaar Team always suggest to choose your best business structure as Private limited Company registration.