Private Limited Companies

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  • Private Limited Companies (ltd)
    • Businesses that sell shares privately to invited members
    • These businesses get their name because they have limited liability
      • This means that owners’ personal possessions are not at risk. If thebusiness gets into debt with creditors, the owners only lose theirinvestment in the company.
    • Disadvantages
      • Profits have to be shared with many shareholders by 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, meaning that profits are not kept private
    • Ownership
      • 1-50 shareholders
    • Examples
      • Plumber
      • Hairdresser
      • Accountant
    • Main documents
      • Memorandum of Association
      • Articles of Association
    • Main Aims
      • maximise profits
      • to grow
      • increase market share.


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