Private Limited Company is “Limited by Shares” i.e. there are shareholders associated with the company and the theoretical value of the shares & any paid in return for the issue of shares by the corporation is limited to the capital which is initially invested.
ADVANTAGES OF PRIVATE LIMITED COMPANY
Private limited company is the most popular corporate entity amongst small, medium and large businesses in India due to various advantages.
• Ideal for Startups & Growing Business
• Easy to Get Funding, Raise Venture Capital Fund, Additional capital can easily be raised by selling shares
• Member's liability is restricted to the amount of shares they own. They have limited liability
• Members are well known to each other; however control is in the hands of owners of capital.
• In the management of affairs and conduct of business is greater flexibility.
• The number of directors in a private limited company is at least two.
• Private limited company is that its limited liability, due to which every members enjoy this facility. It has the advantage of a public company and a partnership firm.
• A private company after receiving certificate of incorporation start business immediately.
• The company can continue to trade even if one of its member’s dies
• Shares can be bought and sold with director's approval
• The private company has a separate legal existence from that of its owners. It can own property and sue and be sued
• This type of organisation has a much higher business status than a sole trader
DISADVANTAGES OF PRIVATE LIMITED COMPANY
One of the disadvantages of private limited company is that it restricts transferability of shares by its articles.
• In a private limited company the number of members in any case cannot exceed200.
• Another disadvantage of private limited company is that it cannot issue prospectus to general public.
• In stock exchange shares cannot be quoted. Audited annual returns and accounts have to be made to the Registrar of Companies. All these documents are available for public inspection
• A private limited company id more expensive and time consuming to set up than a sole trader or partnership
• Professional help will be needed to set up a private limited company
• There is separation of ownership and control which means that the owners no longer make all the decisions
Start your Private Limited with firstmancorp.com because we serve you beyond your satisfaction.
Siva Subramanian C
FirstMan Corporate Services LLP
Chennai - India
+91 97878 97000