A private limited company is a business structure formed when there is a minimum of 2 and a maximum of 200 members. An individual who is either an Indian or a Foreign citizen who wants to start a business must choose a business structure such as a proprietorship, partnership firm, limited liability partnership, private limited company, or public limited company to form an entity. After deciding on the business structure, one must examine the private limited company registration in Mumbai procedure and other related aspects.    

Let’s understand the benefits and registration procedure for the Pvt ltd company registration in Mumbai 

Benefits of registering as a Pvt ltd Company Registration 

In pvt ltd company registration an entity means something with an actual existence, a distinct existence. A company is an entity recognized by law and established as a legal person under the relevant legislation.  A juristic person is distinct from a natural or human person. Therefore, a company organization has vast legal capacity to own property and incur debts. Shareholders and directors of a company are not personally responsible for the company's debts to creditors. Therefore, PVT Ltd. is recognized as a distinct legal entity separate from its members. 

A company has ‘perpetual succession,’ which is continued or uninterrupted existence until it is legally dissolved. A company, as a distinct legal entity, remains unaffected by the death or departure of any member, persisting regardless of changes in its ownership. Perpetual succession is one of a company's most important characteristics.  

Limited Liability means being legally responsible only for a limited amount of a company's debts. In contrast to sole proprietorships and partnerships, a limited liability company restricts the liability of its members concerning the company's debts. Put simply, members' liability in a company is limited to the value of the shares they hold. Therefore, where shares limit a company, the liability of the members on a winding-up is limited to the amount unpaid on their shares.  

Shareholders in a company limited by shares have the ability to transfer their shares to any other individual.. The transfer is more accessible than transferring an interest in a business run as a proprietary concern or a partnership. Filing and signing a share transfer form and handing over the buyer and share certificate can quickly transfer shares.  

A company, being a juristic person, can acquire, own, enjoy, and alienate property in its name. If the company operates, no shareholder can assert ownership over its assets. Shareholders do not own the company's assets; rather, the company itself is the rightful owner. 

To sue someone means to initiate legal action against them or to bring a case to court. Just as one person can bring a legal action in their name against another in that person’s name, a company, an independent legal entity, can sue and be sued in its name. 

There are multiple benefits of PVT over the other types of business entities; they are not only easy and, at the same time, quite affordable to start, but they also carry credibility as they have legally incorporated entities. When one registers in a PVT, they can avail themselves of many benefits such as least liability protection, different legal entities, and tax benefits. Reviewing the various benefits before deciding which will be based on your business type, needs, and long-term goals is essential. Shah and Doshi is a chartered accountant firm based in Mumbai that offers tax and audit consultation services to clients in different business sectors. The focus of the experts at Shah and Doshi is to understand the core values of different businesses while boosting growth and minimizing risk factors. If you are looking for a private limited company registration in Mumbai, get in touch with Shah and Doshi.