Private Limited Company Term Papers
A Private Limited Company refers to a company that is either incorporated in the UK, Ireland or certain Commonwealth countries.
Just £7.95 Per Page - Order Now
Legally, the firm is separate from its owners and has its own book of profit/loss, assets and liabilities. It is registered as a limited liability company which means that the owner does not risk loosing all his wealth if the company falls into bankruptcy. That is, the personal assets of the owner are secure and at most, his stake in the company is at risk in case the company falls. The ownership of the company is set up by dividing its shares in a maximum of 50 people all of whom have to be ‘desirable’ individuals like family members and business partners. A private limited company is not authorised to offer its shares to the general public.
In order for a business owner to register as a Private Limited Company, he has to first calculate the true value of his business so that the company can be divided into a number of shares and distributed among a handful of individuals. Usually, professionals from a merchant bank are hired to do this. They take into account the finacial performance of the business in the past and future expectations. This is followed by a careful consideration on the part of the owner on how to distribute the shares and thus, the management control of the company.
Advantages of Private Limited Company:
Funds could be raised for the growth if the company by selling a part of the company to new business partners. Secondly, the owner and his new partners in the business can enjoy limited liability in the case of heavy losses or bankruptcy in the company. This could be a major advantage since it would help attract more investors to the business.
Just £7.95 Per Page - Order Now
The board is responsible for the running of the business and is authorized to make all the major changes in the company. The directors are elected ny shareholders in a meeting.
Also, a limited company is obliged to publish its annual account to the Companies House each year. These accounts can be studied by anyone interested in the company’s financial health.
£100 No Plagiarism Guarantee - Order Your Private Limited Company College Term Papers Now