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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
WHAT IS A LIMITED LIABILTY PARTNERSHIP? A Limited Liability Partnership is a newer form of business partnership where all of the owners have limited personal liability for the financial obligations of the business. There are no general partners in a limited liability partnership, but an LLP is similar to a general partnership. Each limited liability partner contributes to the everyday business operations. However, each partner enjoys limited personal liability for the other partners' acts. All states allow some form of LLP, though state laws vary. Note that some states only allow LLP status for professional partnerships, like accountants, lawyers or architects. In all states, limited liability partnerships can only be formed by registering with the appropriate state office. BENEFITS OF FORMING LIMITED LIABILITY PARTNERSHIP 1. The Liability of each partner is limited to his share as written in the Agreement filed at the time of creation of LLP as compared to Partnership Firms which have unlimited liability. 2. It has a Low Cost of Formation and is Easy to Form. 3. The Partners are not liable for the acts of each other and can be held liable only for their own acts as compared to Partnerships wherein they can be held liable for the acts of their partners as well. 4. Less Restrictions and Compliance are enforced on a LLP by the Govt as compared to the restrictions enforced on a Company. 5. As a Juristic Legal Person, a LLP can sue in its name and be sued by others. The partners are not liable to be sued for dues against the LLP. Start your LLP with firstmancorp.com because we serve you beyond your satisfaction. Siva Subramanian C FirstMan Corporate Services LLP Chennai - India +91 97878 97000
What does it mean to incorporate? Incorporating a business means turning your sole proprietorship or general partnership into a company formally recognized Ministry of Corporate affairs. When a company incorporates, it becomes its own legal business structure set apart from the individuals who founded the business. Through incorporation, the company's owner or owners create a separate legal entity to transact business. This new business entity corporation or limited liability Partnership Company (LLP) transforms the way the business is seen through the eyes of the law and often has more credibility with potential customers, vendors and employees.
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