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Private limited companies.

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Introduction

Mostly all private limited companies are made up of people who know each other such as friends, family or any other work associates. They buy the shares and become part owners of the company. Shares cannot be bought by the public, but only by this small group of people, in other words the owner can control who buys the shares. This is why it is called a private limited company. There must be a limited of 2 people to start the business, but there's no upper limit or how many owners there are. A private limited company has limited at the end, which is also known as Ltd, this is to distinguish it from a public limited company. ...read more.

Middle

The owners and shareholders have the option to run the company. Each year the company must hold an Annual General Meeting of the shareholders. They also have to send an independently photo copy of the company accounts to the registrar of companies where they are available to the public. The shareholders cannot sell their shares to the general public on the stock exchange and or transfer then to anyone else without permission from other shareholders. Setting up a Private Limited Company If bill wants to start a limited company then he has to comply with the companies acts and register the company with the registrar of companies. ...read more.

Conclusion

The main good thing is that their personal possessions are not at risk, unlike partnerships. The company can raise extra capital by selling more shares in the company. The shareholders can employ managers to run the business if they don't wish to run it themselves. Disadvantages The accounts of the company cannot be kept private. The company has to send a copy to the registrar of companies where it is available to public. It is more expensive to set up a limited company than a partnership or sole proprietor. Another major disadvantage is that it cannot sell its shares to the stock market. The company is limited by its Articles of Association as to the type of business it can undertake. ...read more.

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