Advantages of setting up private limited company in India are:
• Private limited company is a separate legal entity in comparison to a sole proprietorship and partnership firms. (They have separate name, seal, assets and liabilities and is capable of owning property, incurring debt, borrowing money, having a bank account, entering into agreement and contracts and suing and being sued)
• In a private limited company the liability of members are limited to the number of shares respectively held by them. (It means if the company undergoes financial distress because of whatsoever reasons, the personal assets of members will not be used to pay the debts of the Company as the liability of the person is limited.)
• Private company has ‘perpetual succession’, that is continued or uninterrupted existence until it is legally dissolved.
• A private limited company arranges its capital by private arrangement from its members. There is no involvement of the general public which is why share allotment in case of private companies is easier and less complicated.
• In the case of private companies, control and management are in the hands of the actual owners of the company. The members have a say but the major control stays in the hands of the owners.
• A private company is allowed to advance a loan to the director of the company and can easily remunerate its directors or staff in the management. It can also appoint anyone to an office of profit
• Private companies have been provided with various exemption in terms of compliances as per Ministry of Corporate Affairs. There are a lesser number of compliances and regulations as compared to public limited companies. Also, multiple disclosures are not required to be made in private limited company.