private limited company Flashcards
1
Q
what is separate legal identity
A
legally, a company has the same rights and responsibilities as an individual
2
Q
give the definition of a private limited company
A
usually a small to medium size business that is owned by shareholders, it can only sell shares privately, usually to family and friends
3
Q
give 7 advantages of an ltd
A
- limited liability
- additional capital can be raised byselling more shares
- keep trading even if a shareholder dies
- has its own legal status
- cheap to set up in comparison with plc
- cannot be taken over
- run by major shareholders
4
Q
give 4 disadvantages of an ltd
A
- more expensive to set up than than sole traders or partnerships
- publish accounts every year
- separation of ownership and control
- difficult to raise additional finance as it is difficult to find new shareholders
