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Eight Advantages Of A Private Limited Company

1.Your Risk In The Business Minimizes:

The major mistake committed by small business people is mixing of business money and personal money. Income and debts from the business are
mixed with personal funds. If the business is profitable proprietor will be benefited. If the business incur loss proprietor will be affected.

When you are creating a private limited company, what you are doing is that, you are creating a lifeless separate entity. You are personally not associating with the business but professionally associating with the business. You need not pay the debts personally. The owner and share holders are not personally liable. Hence it is called Limited Liability Company. Your responsibility is limited. Hence by creating a Limited Liability Company, your personal risk is minimized to the larger extent.

2.Your Tax Burden Reduces:Deduct It

While Sole proprietorship and partnerships pay income tax, Companies pay Corporation tax on their taxable profits. There are many allowances and tax-deductible costs that can be offset against the profits of a company. That means Tax would be paid after deducting many costs incurred by you. In addition to that the current level of Corporation Tax is lower than income tax rates.

3.Your Social Appeal And Reputation Enhances:

With the formation of company, you are declaring to the people that you are serious about the business and its continuity. Lending from the banks is also easier. Banks provide loans against the security of the company’s assets. The greatest advantage is that you can build right team of people. Quality workforce is not hesitant to be part of the company, because of their sense of security.

4. Your Big Dream Realizes:

Big project requires big investment. Few individual efforts cannot generate trust, to get the required investments. Qualified people also not show interest in you. Formation of private limited company multiplies the borrowing capacity of the organization and also secures the deposits and loans from Banks and financial institutions.

A Private Limited Company5. Your Multiple Assets Bring Multiple Advantages:

You play multiple roles and get multiple advantages. As a director you receive remuneration, as a share holder you receive dividend, as a lessor you receive rent etc

6. Your Name Remains In The History:

People may join or leave the company, but the company is permanent. Whether or not you are there your dream enterprise exists eternally, unless it is dissolved.

7.Your Wealth Creation Skills Leverages:

The secret to wealth building is making use of human resources and finical resources. This blending of the resources is possible only with the formation of the company. You can accumulate huge investment from the share holders and business debt from the lenders. Share holders do not fear much, because their risk is limited to the extent of their share.

A Private Limited Company8. Your Transfer Of The Company Is Easy:

In case you want get away from the company you can do it very easily. You can transfer the entire share holdingThe E-Myth Revisited to the intended people as an ongoing concern. This change of ownership saves the time and money and also stamp duty. The major disadvantage of the private limited company is maintenance and cost of accounts. You also need to follow various statutory regulations. Before taking the decision weigh the pros and cons of forming a private limited company. But your big dreams not become reality without formation of the Company.  Click This Link And Checkout Why Most Small Businesses Don’t Work and What to Do About It: The E-Myth Revisited.

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