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Advantages - Company
ADVANTAGES OF COMPANY FORM OF BUSINESS
Company form of Organisation has following advantages over
Partnership / Proprietorship
a. Limited Liability
A Company exists as a separate legal entity from the personal life of its shareholders
and Directors. Company and persons who own and manage it are separate entities
and both functions separately. Liability for repayment of debts and lawsuits incurred
by the Company lies on it and not with the persons who own and manage it.
Registering a business form as company adds up an additional layer of protection to
its shareholders in terms of business liability.
b. Perpetual Succession
Company has perpetual succession. Irrespective of the changes in the persons who
own and manage the Company, the Company continues to be the same entity with
the same privileges, immunities, estates and possessions. The Company shall
continue to exist till its winding up in accordance with the provisions of the relevant
c. Transferability of Ownership / Interest
The shares and interest of any member/shareholder in the Company is a movable
property and is easily transferable in the manner provided by the Articles of
Association. In other forms of business, the transfer of interest is not easily possible.
Therefore, it is easier to obtain or transfer the membership of a Company.
d. Separate Property
As a legal entity, Company is capable of owning its funds and other properties. The
Company will be the owner of all the property vested with it. The company can
control, manage and dispose the same ob its behalf. The property of Company is not
the property of its shareholders.
As compared to other forms of business organization, company form of organisation
is always benefited with lower tax rate, better taxable benefits in terms of tax
holidays in specific area of operation, subject to terms and conditions.
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