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Advantages
- Member's liability is restricted to the amount of shares they own. They have limited liability
- Additional capital can easily be raised by selling shares
- The company can continue to trade even if one of its memeber's dies
- Shares can be bought and sold with director's approval
- The private company has a separate legal existence from that of its owners. It can own property and sue and be sued
- This type of organisation has a much higher business status than a sole trader
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Disadvantages
- Audited annual returns and accounts have to be made to the Registrar of Companies. All these documents are available for public inspection
- A private limited company id more expensive and time consuming to set up than a sole trader or partnership
- Professional help will be needed to set up a private limited company
- There is separation of ownership and control which means that the owners no longer make all the decisions
- There are limited opportunities for economies of scale
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