The Liability Is Limited 

A company acquires a legal persona that is distinct from the founder or owner of the company therefore, it is the company that makes profits and suffers losses. The limited liability there only means that the owner only suffers liability to the extent of the capital or investment already put in the company.

It Is Tax Efficient 

The law gives certain exemptions to companies. The promoter can avail certain tax benefits which are only available for companies. This is done because the government recognizes that businesses create jobs and are generally the backbone of the economy.

The Company Is Taxed Not You 

This is one of the major reasons why people are encouraged to open a private limited company. When you open a private limited company, your income as an individual is basically separate from the company’s income. Therefore, your company’s income and not your personal income gets taxed. 

Transparency 

Since public data on the company is easily made available, it ensures that the company is efficiently and legally run and also gives investors to confidence to want to invest in your organization. This is because, they can find out the details of your company, how things are run and how transactions are done and  would want to invest.