Private Limited Company (Ltd)

Question 1

Who is a private limited company owned by?

Answer 1

1-50 private shareholders.

Question 2

Who is a private limited company controlled by?

Answer 2

A board of directors

Question 3

What is a private limited company financed by?

Answer 3

Share equity or can also apply for a grant or bank loan.

Question 4

What are the advantages of a private limited company?

Answer 4

• Owners (shareholders) have limited liability.
• Ownership is not lost to outsiders.
• The business usually retains a close and tight-knit, friendly feel with a high level of customer service.
• Expertise and business acumen are gained from an experienced board of directors.

Question 5

What are the disadvantages of a private limited company?

Answer 5

• Profits have to be split with many shareholders issuing dividends.
• A complicated legal process is required to set up the company.
• A limited source of capital is available as shares are not sold publicly.
• Financial statements have to be shared with Companies House (and are therefore made publicly available), meaning profits are not kept private.