For those who are in the world of business, it is much required at a stage to form a private limited company. There can be many reasons for the same which vary from industry to industry.
Before going to the advantages of the private limited company registration, we must know the exact meaning of the companies and the private limited companies. A company is an association of people lined up together with some disciplinary values for the achievement of certain goals. The existence of the company is with the contemplation of law.
So the process may be with the registration, act of parliament or by the Royal Charter. The existence of the company can be halted or paused only by the orders of the court, not by death or something like that. Now the company can either be a private one or public. In India, there are numerous companies of both the types.
What are private limited companies?
A private limited company is an entity where the transfer of the shares is a legal right if the members of the company and this right are restricted to them only. In this company the number of members are two on a minimum basis and can even exceed to 50 members, leaving apart the present and the past employees. The public is not invited to subscribe to the share capital of the company. The minimum amount of the paid-up capital has to be Rs 1 lakh on a minimum basis. A higher amount can be admitted but never lower than that.
Why is the registration of the private limited company important?
The private limited company registration in India is quite important and beneficial for the company. In this part, the importance of the registration of the private limited companies is discussed. The sole reason for that is a distinct recognition that happens to be offered post-registration.
You get approved from the government that the company can assure the employees of a bright future with and again you make sure that the minimum gains of the company are Rs 1 lakh on a minimum basis. Not only this adds to firmness in the reputation of the company but at the same time this also can make you confident and you can be contented that you can offer recognition to your startup company.
This is the reason why the authority always seeks for the registration. A company always requires individuality and above all the most important out of all is a legal entity is always a necessary part. If the company once gets approved as a private limited company then what happens is the liabilities of the company are treated as a single entity. If the company is held responsible for any debts then the members, as well as the employees of the company, are not personally affected. The members can only be affected regarding the unpaid shares, and that’s all. Thus, getting your company registered can help you get your company a position where it can be a better option for the employees.