Advantages of Establishing a Private Limited Company in India

Posted by Tecnova Global on November 27th, 2019

With the help of consulting firms in India, all the legal framework can be understood properly. If you are a foreign investor and looking for business expansion in India, consulting companies in India can be proven beneficial for your business. With the services offered by entry strategy and consulting firm such as Consulting, Implementation carried forward with Greenfield Manufacturing Set-up, Incubation and Business Development and Executive Research. There are market entry consulting firms thatprovide launchpad with minimal investment to figure out whether the business you are willing to start in India is profitable to you or not. The best and the easiest way to enter into the Indian market is by owning a Private Limited Company with the help of a consulting firm. Let us find out how?

A Private Limited Company can be a good start for foreign investors in India. It is the best possible type of business that can be easily registered because of business exposures, potential growth and financial structuring offered. Simultaneously with the private limited company, it is easier to raise funds from financial institutions because of its higher stability and reliability.  

The company’s registration in India is performed under the legal framework, written under the amendment section of Companies Act, 2013; with the rules constituted hitherto. According to the amendments, a Private Limited Company should have at least two directors, among which one of the two must be an Indian resident and must have two shareholders which can be an individual or corporate entity. 

Now, let’s shift your view towards the advantages of a Private Limited Company in the Indian market.  

Advantages of owning a Private Limited Company

1. Separate Legal Entity: A company possesses a distinct character as being a legal entity and a juristic person established under the act. Therefore, a company who formed an organisation has a wide range of possibilities to hold legal capacity, owning property and can incur debts. With the perspective to the liability of the creditors, the Shareholders and Directors are not associated with such debts.
2. Borrowing Capacity: Companies associated as Pvt. Ltd., enjoys good avenues for borrowing funds. Any Private Limited Company can issue debenture over secure as well as unsecured and can also accept deposits from the public and others. Even backs and financial institutions prefer to lend a larger amount of money to a privately owned company.
3. Shares Transferability: Shares of the company are easily transferable to the other person by an appropriate shareholder. One can fill and file the form, handling the buyer a number of shares along with share certificates associated with.
4. Foreign Direct Investment: As per the new laws, 100% of Foreign Direct Investment (FDI) is allowed in many sectors such as Pharmaceuticals, Automation and others of India as per the announcement made by Governmental officials. The FDI is not allowed for Proprietorship or Partnership, LLP which requires prior Government approvals.
5. Owing Property: A Private Limited Company is a separate entity which has the allowance to acquire, enjoy and alienate property by company’s own name. No claim can be proclaimed by any of the Shareholder until the company is functioning.

Tecnova is an Entry consulting firm in India, with the expertise of three decades. It helps foreign investors to invest in India via a Government route or Automatic route. With the services offered, Tecnova has assisted global brands such as Ferrari and Hardley Davidson to help them making establishment for business expansion.   

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