Advantages and Disadvantages of Company form of Organisation

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Reading Time: 2 minutes| (Last Updated On: December 14, 2017)

Advantages and Disadvantages of Company

A Company Distinct Legal Entity :

Advantages and Disadvantages of Company

Right after the registration, a company becomes a distinct legal entity, other from its members with its own name, seal, assets and liabilities. It can own a property in its name, incur the debt, borrow money, own a bank account, employ the people, enter into contracts and can also sue or can be sued distinctively.

Limited Liability :

Advantages and Disadvantages of Company

The liability of the members of the company is confined to their promised contribution to the capital of the company which he subscribes. Moreover, a member is required to pay only the uncalled money that is due on the shares held by him.

Perpetual Succession :

Another most important advantage of a Private Limited Company is that the company is consistent, thus it never ceases to exist even in the case of death or insolvency of the member. Although, the membership of a company may go in different hands from time to time but the company doesn’t get affected by it.

Enables Free Transfer of Shares :

Advantages and Disadvantages of Company

Yes, the shares of a Private Limited Company are freely transferable under certain conditions. Thus, with the transfer of shares, the transferee acquires all the rights of the transferor associated with the shares.

Common Seal :

Company does not have a physical presence being an artificial person. Consequently, Board of Directors carries out all the activities. These directors also enters into several agreements and it has to be noted that such contracts come under the seal of the company which is also the official signature of the company. The common seal of the company has the name of the company engraved on it. However the adoption of common seal is no longer necessary after amendment of companies Act in 2015.

Capacity to Sue or to be sued :

Last but not the least, a company also carries the right to sue and can also be sued in its own name distinctively from its members.
Undoubtedly, every individual who starts the business possess the dreams or aspirations of being successful enough to recruit or provide employment to at least a dozen of people. Taking into view the same, one needs to be aware that it’s not possible to legally hire employees if the company is not registered. Getting your Company Registered by Professional and Experienced Company Registration Consultants is a prudent step to be followed in order to turn your entrepreneurial dreams into reality. Hence, it is highly recommended to register your company right from the day of its inception. Our Startup Specialists are experienced and capable to answer your queries.

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