UNIT ONE
AO2
Unit Title- Investigating Business
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) for shareholders, the maximisation of market share and the expansion of the business.
Other aims comprise of auxiliary investment and to preserve the business at a high standard.
The main reasons for setting up a LTD are:
