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Separate legal entity means distinct identity from its owners, I.e., the private limited company is artificial independent person in the eyes of law represented by its board of directors. So In case of Separate legal entity owner (shareholders) is different from business (Private limited company). If the business incur losses personal assets of owners are safe.
For startups it is very difficult to attract and retain talent. With the private limited company it is easy to motivate employees with corporate designation and with stock options.
Private limited company can raise private equity funds by issuing equity shares and secured loans by issue of debentures. Banks and financial institutes prefer to give loans to private limited company compared to partnership firm and proprietorship firm. Since Private Limited is favorable and preferred business structure it is easy to attract angel investor and venture capitalists.
It is easy to transfer business by transferring shares of shareholders. Share certificate is sufficient to transfer ownership of a company in private limited.