limited companies

Question 1

what is a limited company?

Answer 1

a limited company is a separate legal unit from its owners which means that a company exists separately from the owners and will continue to exist if one of the owners died

Question 2

what is a private a limited company?

Answer 2

these are owned and operated by shareholders, often friends or family members. the shares in a pvt cannot be sold or transferred to anyone without the agreement of the other shareholders and shares cannot be traded in stock exchange

Question 3

3 advantages of a pvt

Answer 3

• the business will continue even after the death of a partner
• all shareholders have limited liability which means they are only responsible for the original investment in their shares
• the people who start the business are able to keep control of it as long as they do not sell any shares to the other people

Question 4

3 disadvantages of a pvt

Answer 4

• forming a company itself is time consuming and expensive
• profits have to shared between all the shareholders
• shares cannot be shared or transferred to anyone else other than friends and family