C.A M.com B.com(accounting and finance
75 Points
Joined November 2008
there are advantages as well as disadvantages however i am illustrating those which i am aware of...
advantages-such as increased flow of capital as limit of members is upto 50 whereas in case of a partnership firm its only 20, liability of members of a pvt. ltd co is limited...basically if one has an idea of expansion the can go for conversion into pvt .ltd co.
disadvantages- there are certain disadvantages also such as if u see that inflow of capital is possible at the same time there will be dilution of profits...., there are a lot of formalities involved in conversion,as well as assets contributed by the partner to the firm previously will be treated as the company's asset and not that partners asset.....etc..