• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Private Limited Company - Advantages and Disadvantages

Extracts from this document...

Introduction

Definition A private limited company (LTD) is a business that is unable to float its shares on the stock exchange, however it may issue its shares to friends, family and employees. This type of company can be registered by having a LTD at the end of their chosen name. Basis Unlike the sole trader and partnership business previously mentioned, the legal position of the company is completely unaffected by the death or retirement of one of its shareholders. Shareholders enjoy the privilege of limited liability, which means they are only liable to meet the debts of the company only to the extent that thy have invested into the business. ...read more.

Middle

There must be a minimum of one shareholder and at least one director. To set up a business such as a LTD (Private Limited Company), one must register with the registrar of companies at Dublin's castle. A Memorandum of Association must be prepared which establishes the company and determines the objects the business, which it is to conduct. Additionally, the Articles of Association must be prepared, which contains the internal constraints governing the conduct if the company as between the shareholders and the board of directors of the company. ...read more.

Conclusion

* If you are expecting large profits from your business, being a LTD company may provide more advantageous tax treatment. * The Companies Act provides a standard and convenient management structure for you to follow. * Able to gain tighter control of your company as you decide whom you issue shares to. * A LTD has a greater status than of a sole trader or a partnership. Disadvantages * The legal requirements, which have to be met before you can operate the business, are quite complex and lengthy. * Annual accounts must be audited by the company's house, which could be costly and time consuming to prepare. * The public have access to your companies annual reports therefore you have less business privacy. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Structures, Objectives & External Influences section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Structures, Objectives & External Influences essays

  1. Marked by a teacher

    Marketing Management - Swisher Mower and Machine Company.

    5 star(s)

    The private proposal would offer stable orders to SMC. * SMC could fully utilize its currently idle production capacity. Without acceptance of this private label proposal, the idle manufacturing capacity is 5,800 units per annum, more than 50% of total capacity. The high opportunity cost incurred could not be neglected.

  2. For my portfolio, I was asked to do an assignment on two businesses. I ...

    Type of Ownership of Vectone Gnanam Telecom Ltd Vectone Gnanam is a private limited company, which started as a sole trader. They provide cheap Telecommunication services. When they started to sell only Gnanam cards when they have a demand in local and international market they thought to provide various kinds of customers from different countries.

  1. Advantages and disadvantages of a public limited company

    A public limited company can also benefit from economies of scale because organisations such as Tesco's need to purchase large amounts of goods of the same type in order to meet the needs of their customers. This means they may be entitles to cheaper borrowing and bulk purchasing from their suppliers.

  2. Introduction to incorporation.

    The company will always be liable to the full extent of its debts. The liability of the members, whether limited or unlimited, is to the company, not to the individual creditors of the company. (a) Unlimited Companies (i) Members have unlimited liability (If company is being wound up, members can

  1. Ownership of J.Sainsburys J.Sainsburys is a public limited company.

    and Finance Director of Hong Kong Airport Authority (1992-1996). Chairman of Macmillan Cancer Relief. Age 54. Bob Stack Non-Executive Director Will be joining in January 2005. Bob Stack joined Cadbury Beverages in the US in 1990 and joined the Cadbury Schweppes Board in May 1996 as group human resources director.

  2. The Legal Eagles

    * May be unable to benefit from buying in bulk and thus be unable to offer competitive prices. * Job satisfaction and interest is gained by working for yourself. * Division of labour may be difficult because of the small size of the business.

  1. I have chosen to base my assignment on the following two businesses: Sole trader- ...

    Disadvantages 1. You will be working long hours to meet all the deadlines. 2. You are the only person, who owns the business, so you have "Unlimited Liability" 3. You may only know have limited skills. 4. If you are ill you will and your business is closed the owner will make no money.

  2. Applied Business. Investigating a business Preston Manor High School

    year old The school wants to provide a better service; they are providing the best text books, computers, best sports facilities (gym, sports equipments such as rackets, bats and balls) and working equipment facilities for students such as pencils, pens, tables, chairs and books.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work