Anyone can choose a Private limited company to build a scalable business. It’s the most famous legal structure for the business. There is limited liability for all the directors, in case of bankruptcy, banks/creditors can sell only company assets but not the personal assets of directors. Due to its openness to all market scenarios, the private limited structure is very famous for small, medium, and large businesses in India. This structure Is very flexible to external funding and investment. Stock option for employees is also possible through a private limited structure. A Private limited company has more credibility as compared to other incorporation structures.
If you want to limit your responsibilities, planning to get external funds/investment, and want to be more credible in the market, then Private Limited Company (Pvt. Ltd) might be the best option to go with.
Benefits of converting Partnership Firm into a Company:
- Shields personal assets from business liability, limits liabilities of Directors
- The Private Limited Company (Pvt. Ltd) continues to exist even after the death of a Shareholder
- Open doors to raise capital from a venture capitalist, angel investor, financial institutions, etc.
- Creates brand value as a Private Limited structure is more transparent compared to other business structures
- Ownership gets transferred by just transferring shares
- Private Limited Company is a unique identity and can own/acquire and alienate, property in its name. Property owned could be anything like Copyrights, Patents, Trademarks, Building, Intangible Assets, Land, Residential property, Factory, etc.