The outstanding advantages of a Company over other forms of business associations or organizations are as follows:
- A company is a distinct, legal entity and independent of those persons who from time to time are its members.
- Since a company is a rightful legal entity, therefore it can preferably sue, and also be sued in its registered name.
- A company commands the power to own, acquire, sale, or alienate any property in its registered name. No members of the company can ever make any claim over such property of the company, as long as the company is a going concern.
- A company is fortified by law to follow the continuity and perpetual succession. And therefore, a company continues to perform it functions naturally and unaffectedly despite the changes, retirement, death, or disability of one or more of its members, in the course of time.
- Changes or modifications in the members’ interest and in the memorandum of the company are possible to be made but, without affecting adversely the property, activities, business or existence of the company.
- Transferability of the company’s shares encourages its liquidity and investment, as long as by doing so, there is no adverse effect to the economic stability of the company.
- The members of the company equitably share the profit by way of dividend and the company’s assets in the event of its winding up in proportion of the capital respectively contributed by them.
- Larger the number of shareholders, greater the company’s fund, and better the growth opportunities.
- Highly productive, prolific, and efficient incorporation of the company, results in better professionalism, requisite banking and financial assistance, management, lenient taxation, and well-rounded administration of the company.
- A registered company can be dissolved but only according to the provisions of law.
- There can be legally recognized interactions and transactions between the company and any of its members or employees, depending on and varying according to the arrangements and provisions of the company Act.
- In certain cases, an incorporated company comparatively stands in a better position from the point of view of taxation on its income.
- Shares of small denomination afford an opportunity to the small investors to invest according to their capacity.
- The corporate form of business organization affords opportunity for professionalization of its management and entrusting the administration of its affairs to persons of professional competence and standing.