Benefits of Incorporated Business


An incorporated business means a business entity registered and incorporated under any Law. In India, ‘Limited Company’ and ‘Limited Liability Partnership’ are the incorporated business forms. Limited Companies are classified as One Person Company (OPC), ‘Private Limited Company’ and ‘Public Limited Company’.

Limited Company is registered and administered under the provision of Companies Act, 2013 and Limited Liability Partnership is registered and administered under the provision of Limited Liability Partnership Act 2008.

Benefits of Incorporated Business

An incorporated business (‘Limited Company’ and ‘Limited Liability Partnership’) has the following advantages:

Acceptance

An incorporated business is the most accepted business organization the structure and is well known to the public.

Limited Liability

The owner’s liability is limited to the extent of agreed capital contribution to the business and ends once he pays agreed capital.

Protection of Personal Assets of owners:

As the liability of owners is limited, their personal assets are protected against the business risk as the company’s liability is not the liability of its owners.

Perpetual existence:

Assets and liabilities of an incorporated business belongs to itself and do not belong to the share owners. Hence, an incorporated business will continue to be in existence even if the owner changes.

Can sue and be sued

An incorporated business is an artificial person created by law. Like any other person, it can sue and be sued before the court of law. This means that if an incorporated entity defaults, others can take legal action against the entity and likewise the business can take legal action against defaulters.