Private Limited Companies (Ltd's)

Question 1

What are private limited companies (Ltd’s)

Answer 1

An incorporated business that is owned by shareholders who tend to be family and friends of the entrepreneur. They benefit from limited liability.

Question 2

What are the advantages for private limited companies (Ltd’s)

Answer 2

Limited Liability
Potential to raise capital through selling shares
Separate legal identity
Owners are invited to invest = Control –for the owners

Question 3

What are the disadvantages for private limited companies (Ltd’s)

Answer 3

Greater regulatory responsibilities than an
Cannot sell shares on the stock market - limiting financial opportunities
Suppliers may view limited liability as a risk
The costs of starting up
Financial records are available publically