Private Limited Companies
- A private limited company is a business that is owned by one or more shareholders whose responsibility for debts is limited to the level of their initial investment (the price they paid for the shares)
- The business name is suffixed with 'Limited' or 'Ltd' in the UK and S.A. in Spain
- Shareholders are often family members or close friends
- Shareholders are usually also directors who run the business on a day to day basis
- Private limited companies are registered with Companies House and need to submit details of financial performance and changes in ownership each year
- Private limited companies may be more suitable than sole traders or partnerships if setting up the business involves significant capital investment, or involves some risk
- The owners personal assets are protected as they have limited liability
- Most private limited companies are owned and controlled by just one person (just like sole traders) who has made the decision to reduce their personal financial risks by forming a company that provides them with limited liability protection
- In some countries it is possible to form a limited liability partnership
- Sleeping partners invest money but take no part in decision-making
- At least one partner must continue to accept unlimited liability
Advantages & Disadvantages of Private Limited Companies
Advantages |
Disadvantages |
|
|