What Are The Advantages And Disadvantages Of A Private Limited Company?

Advantages &disadvantage of private company

Private limited company unlike public listed company has certain restrictions to the ownership of the firm. A private limited firm is established with the division of the shares owned by the individuals. The individuals in a private limited company cannot issue their shares to the general public. The shareholders do not have the right to sell or transfer the shares to the general public. They cannot trade their shares and debt securities in organized stock exchanges which serve as a major disadvantage. The number of owners or shareholders is also limited to certain fixed number which is usually 50 or less than 50. The major advantage of a private limited company is that members of the firm are not liable for any financial obligations to its credit holders in the case of liquidity or dissolution of the company.

Advantages:
1. Get to keep all the profit
2. No risk of takeover
3. Owner pays less VAT
4. Make your own decisions

disadvantages:
1. Have to pay high tax