Private Limited Company Registration

A. Owning Assets
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A company can acquire, own, transfer any type of tangible or intangible asset in India. A shareholder is not eligible to claim the company’s property, as they are not owners of the company. A shareholder merely has an interest in the company
arising under the articles of association of the company, measuring a sum for liability.

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C. Perpetual Succession

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Perpetual succession means continuing or enduring forever. A company is considered to be legally active until it is wound up by its members through a legal process. Hence, perpetual succession denotes continuous existence of a corporation or company till it is dissolved legally. Thus, a company is unaffected by death or departure of any member.

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E. Separate Legal Entity

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As per Law, a company is an artificial judicial person established under the Companies Act. A company is a separate legal entity from its Directors and Shareholders. Hence, a company enjoys a wider legal capacity, to own property and incur debts – while the individual company members owe no liability towards the company’s creditors for debts.

B. Equity Raising
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A company is the only type of legal entity which can help the promoters raise equity funding from Angel Investors, Private Equity Firms and the Stock Exchange. A private limited company would suffice for raising equity funds from Angel Investors and Private Equity Investors. In case of listing or allotment of shares to more than 200 shareholders, a Limited Company would be required.

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D. Limited Liability

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Limited liability is a legal responsibility towards a limited amount of debts. The liability of the members with reference to company’s debts are limited i.e.; limited to the face value of the share purchased by them. This limited liability protection is often not afforded to Directors of a company – who are held responsible for operation of a company.

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F. Transferability of Shares

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The ownership of a private limited company is determined by the number of shares held by its shareholders. Shares of a company can be transferred to any other person or legal entity in India or abroad, subject to the articles of association of a company and the shareholders agreement. The easy transferability of shares is one of the top reason, Entrepreneurs opt to register a company.