1.5.4 Private Limited Companies

Question 1

Features of private limited companies

Answer 1

• business name ends in LTD
• Shares can’t be brought by public
• Owners control who buys shares
• made up of ppl who know eachother e.g usually friends/fam who buy shares(they become part owners)
• Limited Liability
• Usually small-medium sized business

Question 2

Pros of private limited companies - 3

Answer 2

• limited liability
• can raise extra capital by selling issuing more shares - easier to expand
• control of the business can’t be lost due to outsiders

Question 3

Cons of private limited companies -3.

Answer 3

• Harder to set up than sole traders or partnerships e.g legal documents need to be sent off
• Accounts of the company can’t be private and are public (?) Hows this a con
• Cannot raise large amount of shares through selling shares publicly and on stock exchange