1. Limited Liability Protection

• Shareholders’ personal assets are protected from business liabilities
  
• Their risk is limited to the unpaid amount on shares held
  
• Reduces financial exposure in case of business failure or legal claims
  

2. Separate Legal Entity

• The company has a distinct legal identity from its owners
  
• It can own property, enter contracts, sue or be sued in its own name
  
• Ensures continuity even if directors or shareholders change
  

3. Ease of Fundraising

• Easier to raise capital through private equity, venture capital, or loans
  
• Can issue shares or convertible instruments to investors
  
• Preferred structure for professional and institutional investors
  

4. Enhanced Business Credibility

• Registered companies are seen as more trustworthy and professional
  
• Required compliance with the law improves transparency and accountability
  
• Helps in securing contracts, tenders, and business partnerships
  

5. Tax and Operational Benefits

• Eligible for corporate tax advantages and deductions under the Income Tax Act
  
• Possibility to carry forward business losses
  
• Can offer Employee Stock Options (ESOPs) to attract and retain talent