Registering your business as a company comes with several advantages that you won’t get with other business structures like a proprietorship or partnership firm. A company is a legal entity that has its own rights, liabilities, and legal proceedings. It is a juristic person established under the Companies Act, and it can sue and be sued on its own name.One of the biggest advantages of registering a company is that it has perpetual succession. This means that the company will continue to exist even if the directors or shareholders change or die. This provides stability and continuity to the business.Another advantage is that a company has limited liability. This means that the shareholders are only liable for the amount of their shares, and the company’s assets are separate from the shareholders’ assets. This protects the shareholders from personal liability for the company’s debts.A company also has a common seal, which is a stamp that shows the company’s name and address. This is used to authenticate documents and contracts.Registering a company also gives it a distinct legal personality, which means that it is separate from its directors and shareholders. This provides a level of protection for the directors and shareholders from personal liability for the company’s debts.In summary, registering your business as a company provides several advantages, including perpetual succession, limited liability, a common seal, and a distinct legal personality. These advantages make it a more stable and secure business structure than other business structures like a proprietorship or partnership firm.Frequently Asked Questions:
- What is a company?
A company is a legal entity that has its own rights, liabilities, and legal proceedings. It is a juristic person established under the Companies Act, and it can sue and be sued on its own name. - What are the advantages of registering a company?
Registering a company provides several advantages, including perpetual succession, limited liability, a common seal, and a distinct legal personality. These advantages make it a more stable and secure business structure than other business structures like a proprietorship or partnership firm. - What is perpetual succession?
Perpetual succession means that the company will continue to exist even if the directors or shareholders change or die. This provides stability and continuity to the business. - What is limited liability?
Limited liability means that the shareholders are only liable for the amount of their shares, and the company’s assets are separate from the shareholders’ assets. This protects the shareholders from personal liability for the company’s debts. - What is a common seal?
A common seal is a stamp that shows the company’s name and address. This is used to authenticate documents and contracts.
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