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Why should your startup be registered as a Private Limited Company?

Are you planning for a Startup Company? Are you having an innovative business idea in your mind to build your Startup Company? Yes, here I am providing you the best reasons on why your company should be registered as a Private Limited Company.

Come out of your 9 to 5 Job and build your dream company.

You need to have a minimum of 2 shareholders to start a private limited company. You can have maximum up to 50 shareholders in a private limited company.

Checklist for the GOALS of your Company.

  • Understand and Finalize on the number of the partners of your company.
  • Are you planning to raise the Seed Investment for your company? Then, the private limited company is the right option for you as you can provide the shares of your company to the Investor for the Investment obtained.
  • Are you planning to be a Share holder and recruit a director to run the company? If yes, then the Private Limited Company is the right choice for you.

Why register your company as a Private Limited Company?

  • Limited Liability.
  • Access to the Funding/Investment through shares.
  • Debentures and Convertible debentures are easy.
  • More Credible
  • Shareholders can exit easily.
  • Expansion of the Company across different cities.
  • Handful opportunities.
  • Easy Governance.
Why should your startup be registered as a Private Limited Company?

Limited Liability in the Private Limited Company

Every business would be facing a lot of financial crises at any point of time. To curb this issue and safeguard the assets of the director the Private Limited Company is the right choice. In the verge of the company’s closure or the shut down the private limited company’s shareholders do not need to worry on their personal asset being lost. Any Private Limited company’s personal assets will not be lost or disturbed when the company goes into a loss. Only the Invested amount in the company will be a loss for the Shareholders.

Access to the Investment is quite easy with the Private Limited Company

As a Private Limited company, you can easily raise the Investment from the Angel Investor, Private Equity Company and Venture Capitalist with the Shares of your Private Limited Company. In a simple form, the Equity Investment can be raised in the Private Limited Company. The Limited Liability, the directors and the shareholders have a perfect distinction when registering the private limited company. Some Private Limited companies are also providing the shares of their company to their workforce when they are not able to provide the compensation as salaries.

Debentures and Convertible debentures with the Private Limited Company.

As per Section 71 of the Companies Act, 2013, a company can issue debentures with an option to convert such debentures into shares, either wholly or partly at the time of redemption. In a Simplified way, Debentures is an Instrument acknowledging the debt by a company to any single person or a group of people.

Convertible debentures are the debentures which can be converted either fully or partly into the shares in a certain time frame. The Person who has got debentures can convert their debentures into the shares of the company either partially or fully.

Getting debt from the Investors, General Public and the banks are easy with the Private Limited Company.

Private Limited Company is More Credible

The Structure of the Private Limited Company, The Financials, The Number of the partners of the company information must be mentioned to the Registrar of the companies.  The Important details of such as authorized capital, names of directors, registered office is mentioned in the Public Domain website to be available for the Public. Any of your Vendors, Customers, Clients, Partners and Employees can easily avail this Information.

Shareholders Can Exit Easily.

Shareholders of the company can exit easily by selling their shares to the new shareholder.

Expansion Of the Company Across Different Cities and Countries.

As a Private Limited Company, you have the access to expand your business across different cites in India. As a Private Limited company, you can get Investment from Foreign Companies and Collaborate with the Foreign companies/establishments.

Handful of Opportunities.

As a Private Limited company, you can expand your Services to the different sectors and the industries. The Scope of utilizing the chances of expansion is more in the Private Limited company.

Easy Governance.

As a Private Limited Companies are regulated by Companies Act 2013, The Private Limited Companies need to follow the procedures, disclose norms and comply with the legal requirements.

Documents Required for the Registration of the Private Limited Company

  • Photo
  • PAN Card Copy
  • Aadhar Card/Voter ID/ Passport Port/ Driving License Copy
  • Last 2 Months Bank statement (If Available)
  • Mail id and Mobile Number
  • Digital Signature of the Proposed Directors
  • And Copy of Electricity bill along with NOC/ Rent Agreement of the premises, which will be the registered office of the company after incorporation.

Are You Looking to Register your Startup as a Private Limited Company?

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