PRIVATE LIMITED COMPANY : Advantages and disadvantages
10.4 هزار بار بازدید -
4 سال پیش
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A Private limited company is
A Private limited company is formed lawfully with limited liability or legal protection for its shareholders but that places restrictions on its ownership.
A Private Limited Company is a company which is privately held for small businesses. The liability of the members of a Private Limited Company is limited to the number of shares respectively held by them. Shares of Private Limited Company cannot be publicly traded.
Private Limited Company is the simplest and a very popular form of Business Registration in India. It can be registered with a minimum of two people. Limited liability protection to shareholders, ability to raise equity funds, separate legal entity status make it the most recommended type of business entity for millions of small and medium-sized businesses that are family owned or professionally managed.
Here are some advantages to a Private Limited Company.
There is a Limited risk to personal assets in Private Limited Company.
Pvt. Ltd. Co. is a Separate Legal Entity.In the Private Limited Company there would Limited Liability for members.Shares of a company limited by shares are transferable by a shareholder to any other person. The transfer is easy as compared to the transfer of interest in business run as a proprietary concern or a partnership .Just as one person can bring a legal action in his/her own name against another in that person’s name, a company being an independent legal entity can sue and be sued in its own name.A company has ‘perpetual succession’, that is continued or uninterrupted existence until it is legally dissolved.For a private company, the earlier minimum number of the share capital was Rs. 1,00,000, but now there is no such minimum capital compulsion. Therefore there is no pressure of fund requirements.It is easy to fetch funding in a private limited company by transferring of shares.
Disadvantages of a Private Limited Company:
One of the main disadvantages of a private limited company is that it restricts the transfer ability of shares by its articles.
In a private limited company the number of members in any case cannot exceed 50.
Another disadvantage of private limited company is that it cannot issue prospectus to public.
In stock exchange shares cannot be quoted.Advantages of Private Limited Company:
A Private Limited Company is a company which is privately held for small businesses. The liability of the members of a Private Limited Company is limited to the number of shares respectively held by them. Shares of Private Limited Company cannot be publicly traded.
Private Limited Company is the simplest and a very popular form of Business Registration in India. It can be registered with a minimum of two people. Limited liability protection to shareholders, ability to raise equity funds, separate legal entity status make it the most recommended type of business entity for millions of small and medium-sized businesses that are family owned or professionally managed.
Here are some advantages to a Private Limited Company.
There is a Limited risk to personal assets in Private Limited Company.
Pvt. Ltd. Co. is a Separate Legal Entity.In the Private Limited Company there would Limited Liability for members.Shares of a company limited by shares are transferable by a shareholder to any other person. The transfer is easy as compared to the transfer of interest in business run as a proprietary concern or a partnership .Just as one person can bring a legal action in his/her own name against another in that person’s name, a company being an independent legal entity can sue and be sued in its own name.A company has ‘perpetual succession’, that is continued or uninterrupted existence until it is legally dissolved.For a private company, the earlier minimum number of the share capital was Rs. 1,00,000, but now there is no such minimum capital compulsion. Therefore there is no pressure of fund requirements.It is easy to fetch funding in a private limited company by transferring of shares.
Disadvantages of a Private Limited Company:
One of the main disadvantages of a private limited company is that it restricts the transfer ability of shares by its articles.
In a private limited company the number of members in any case cannot exceed 50.
Another disadvantage of private limited company is that it cannot issue prospectus to public.
In stock exchange shares cannot be quoted.Advantages of Private Limited Company:
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