Easy to generate funds
Raising funds being a Pvt Ltd company is a much simpler task as it provides scope of garnering shares and has several ways of generating funds as private equities, ESOP, etc.
Minimum responsibility of Owners
The charges of debts don’t put additional charges on personal assets of the company. Their responsibility remains confined within the subscribed capital not paid by them.
Tax-related advantages
Companies under the category of Open Person don’t fall under Income Tax Act, thus fall under same groups as of others regarding taxation. In general, private companies do fall under the tax category of 305 of the gross income. Hence, from the taxation point of view, the theory of One Person Company looks nominally profitable theory as it puts extensive financial pressure.
Distinct Legal Value
The moment a Private Limited Company is registered, a legal unit is established in legal vision that is distinct from the owners and managers. The company can function in its own name, be it about creating a bank account or procuring its own assets and being under the contract with concerned parties. It, too, gives a scope of suing third parties.
