Private Ltd Company is the most preferred business structures in India among entrepreneurs. This is because of a number of advantages that a private limited structure of business offers to the business. Pvt Ltd company registration gives following advantages to the entrepreneurs.
Advantages of Pvt Ltd Company
- Separate legal entity
- Limited liability
- Continual existence
- Easy share transferability
- Can own assets
- Can raise funds in lieu of shares
Types of Private Limited Company
There are three types of Pvt Ltd Companies in India based on the level of liability of members towards the loss.
Pvt Ltd Company (limited by shares)
In this form of private limited company, liability of the shareholders is limited to the value of shares owned by them in the company.
Pvt Ltd Company (limited by guarantee)
In this form of pvt limited company, liability of the shareholder is limited to the value of guarantee held by company on behalf of the shareholder.
Pvt Ltd Company (unlimited)
In this form of pvt ltd company, liability of members is unlimited as their personal assets can also be used to fulfill the liability and debts.