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Private Limited company

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Introduction

Private Limited Companies A private limited company is also known as a LTD. It is a registered company which has limited liability. The extent of a private limited company differs from medium to large. LTD's are incorporated, which means they have a separate legal identity to their shareholders. This equates that if the company by any change goes bankrupt; the shareholders will not be affected and will remain in their positions. The shareholders can only lose the amount of capital they put into the business to start with, no more and no less- you cannot lose more than you invest. Private limited companies are entitled to sell their shares to people of the owners' choice, like family members and friends. The main aims of a private limited company include maximisation of profit in order to maximise returns (dividends) ...read more.

Middle

- Firstly the company needs to register at Companies House, which is situated in Cardiff. - Secondly the company must derive up a 'Memorandum of Association', this sets out what deeds the company can carry out. - Thirdly the company will need to draw up an 'Articles of Association', this is the rule book for the internal running of the company, and it sets out what executives can and cannot do. - Lastly the company should acquire from Companies house, a 'Certificate of incorporation'; this is the 'birth certificate' of a LTD. Private limited companies have limited liability because the responsibilities for the debts of the business are inadequate to the sum of money that was first devoted into the business by the shareholders. ...read more.

Conclusion

There is a divorce of ownership from control - the owners may have different views and aims from the directors they appoint; the directors may have different view points from the managers they appoint; and finally the managers may have different viewpoints from the workers they appoint. This can lead to no-one achieving their aims. Large amounts of capital can be raised in fairly short time periods unlike a partnership as there are numerous shareholders. LTD's are Small and less bureaucratic than PLC's, e.g. decisions can be taken more quickly. Unlike sole traders and partnerships a LTD is legally obliged to publish their annual accounts every year. Ownership and control are closely connected, e.g. Board of Directors is usually the main shareholders. Companies are liable to conquests by other companies or the original owners could lose control of the company. Advantages and Disadvantages of a LTD UNIT ONE AO2 Unit Title- Investigating Business Sahar Shafi 10JCU ...read more.

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