January 13, 2017

Private Limited company registration in Pakistan and associated advantages

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Private Limited company registration in Pakistan and associated advantages

Private Limited company registration in Pakistan and associated advantages

Limited Liability:

This is one of the most important and can be deciding factor while considering the form of business ideal for your needs. Starting new business has many risks involved in fact most of the people invest their whole life savings when starting a new business. Therefore it is quite important for any young entrepreneur to limit the risk involved in starting the new business. The risk is best secured through registration of company as private limited or Limited Liability Company. It means that if for some reason the business completely turn out to be unsuccessful the owners of the company or directors will not be liable to contribute beyond the capital of the company with which it is registered. The payment to any creditors of the company or any other person having legal claim on the company shall be liable only to the extent of the capital with which the company is registered.

Taxation:

Private Limited companies’ taxation structure is quite different from that of sole proprietors or partnership firms. Selection of right form of income tax structure can affect a lot towards the actual income tax paid at the end of year.

Name Reservation Advantage:

Registering your business as Limited Liability Company or private limited company provides you with the security of the business name. In simple words as per the provisions of the companies ordinance, 1984 which is applicable law for companies operating in Pakistan no company shall be allowed to register in Pakistan if it name has similarity with the company already registered. This advantage is clearly not provided to sole traders/proprietors or partnership firms and two sole proprietors can be registered with the same name and same is the case for firm. Therefore good will of the business is always at sake if you business is not registered as private limited company.

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