... can be set up as a sole trader, partnership of a private limited company.
- For a private limited company the start up capital may be as little as £100.
- Can be wholly owned by the entrepreneur or other people bought in as investors.
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- The shares of a private limited company cannot be bought and sold without the agreement of the directors.
- Company cannot be listed on the stock market meaning that it's possible to maintain close control over how the business is run.
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- A legal requirement for private companies is that they must state 'Ltd' after their name.
- Warns those dealing with them that the firm is relatively small and has limited liability.
- Cheques of a limited company are not as secure as ones from an unlimited liability business.
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Why a business may want to be an Ltd
- They may want to expand quickly and therefore needs it to be easier to raise extra finance.
- If they want to borrow a large amount of money and want a safety net.
- IF the owner wants to go on hiliday or is ill etc someone else can make decisions for them while they're away
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