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December 20, 2022
Why Private Limited Company Over Startups is Beneficial?
Business Startup in India is one of the most exciting and rewarding experiences of any entrepreneur. One of the important decisions made by entrepreneurs before starting a business in India is the choice of the business entity. The selection of a business entity put a great impact and it becomes one of the deciding factors for ROI (Return on Investment) of the business So, it’s vital to discuss all the business concept and plan with experienced people in this field. This article will highlight some of the reasons “Why Private Limited Company over startups?”
Table of Content
Build a Strong Team
Employees are the company’s greatest strength Let them feel secure and encourage them to perform better every time. Consider them as a part of the company’s family.
Great Businesses Incorporation Services are definitely a part of a great team. Behind every successful business, there are always powerful team members who are highly dedicated to their work and ultimately to the company’s success.
Nowadays experienced employees always demand a high salary. So, to entice a good talent businesses are providing a lot of benefits like flexible timings, stock ownership, and training. Only a Private Limited Incorporation can provide stock ownership & Employee Stock Ownership Plans.
Attract Funding
An entrepreneur without funds is like a student without books. Funds are very important for any business startup in India.A business can be funded in various ways:
- Self-funded
- Funded by Family & Friends
- By Debt or Equity
Growing a business requires funding. Proprietorships, Limited Liability Partnerships &partnership firms cannot issue shares and are thereby unable to attract equity funding.
This demerit can create an issue in the growth of a startup as startup needs equity capital quickly to grow.
Furthermore, a Private Limited Company is a recognized form of organization to get registration under Startup India, an initiative by Government of India for promoting the Startups; for availing various benefits, claiming subsidies, registration of patents and raise funds.
Limit the Risk to Personal Assets
Always try to keep some savings in order to protect your family against a financial issue which can occur anytime in the life. Gain and Loss are a part of any business. It is vital to protect against loss and if the business owner has limited resources, assets of a business will be at risk. So, it’s very important to go for Private Limited Company Registration that provides limited liability to its shareholders and creates a separate legal entity apart from its Directors and Promoters.
Enhance Business Integrity
Nowadays customers, vendors search for integrity in the business they deal with. The business started with partnership firms and proprietorship is generally not registered and hence, can’t be found in the online company database. While starting a private limited company, the information like name of the company, date of registration, registered address and other information is made available in database enhancing company’s integrity.
Pursue Multiple Opportunities
Serial entrepreneurs are often successful entrepreneurs, who generally repeat their success story in multiple ventures of one business. They have the ability to identify the opportunities at the earliest and explore them quickly.
Starting a business as a proprietorship or partnership is not always an easy way to go. You may come across a lot of hindrances in pursuing multiple opportunities’ proprietorship is not considered as a separate legal entity and is linked to a promoter. On the other hand starting a Private Limited Incorporation, allows promoter pursue multiple opportunities due to consistent growth in business with time.
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