Features of Private Limited Company
Limits the personal liability
A Private limited company provides limited liability protection to its owners and shareholders. This means that if the company fails, the owners are not personally liable for any debts or liabilities incurred. This provides a great deal of financial security to the owners, as they are not at risk of losing their personal assets in the event of a business failure.
Separate legal entity
A private limited company is a separate legal entity. This means that the company is recognized by the law as an independent legal entity and is responsible for its own liabilities and obligations. This provides the owners and shareholders with a great deal of freedom as they are not personally responsible for any of the company’s actions.
Easily transferable
The ownership of a private limited company can easily be transferred from one owner to another. This makes it easy for owners to sell their shares and transfer ownership to another person. This makes the company attractive to potential investors and allows for easier access to capital.
Easy and quick registration
The formation of a private limited company is relatively easy compared to other forms of business organizations. There are fewer legal formalities involved and the company can be formed in a matter of days.
Perpetual succession
A private limited company has perpetual succession. This means that the company continues to exist even if its owners or shareholders die or leave the company. This provides a great deal of stability to the company and allows the business to continue even in the event of changes in ownership.
Easy access to capital/funds
A private limited company can be used to raise capital. This is because the company can issue equity and debt instruments to raise funds. This makes it easier for the company to access capital, which is essential for growth and expansion.