Benefits of pvt ltd company over proprietorship firm?

Benefits of pvt ltd company over proprietorship firm?

Information 01.09.2017   0 Comments   1663  Add to Reading List

A Private Limited Company is a company registered under a statute and has a separate legal identity apart from its member, i.e the company and members are different entities, the company can own assets & be liable on its own name, the company can sue and be sued in its own name, the company shall continue to exist even if all the owners cease to exist, the company is a artificial person.

On the other hand a proprietorship firm is just a business name that you carry on, it is the same entity as its proprietor so you as a proprietor are liable for everything.

Following are a few benefits of a Private Ltd Company over a proprietorship:

  1. Separate legal entity apart from its members(the company and owners are two different persons in the eyes of law)
  2. Limited liability (the owners are liability is limited only to the unpaid amount of shares held by them)
  3. Perpetual Legal Existence
  4. Best option if you are looking to attract funding options in future.

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