It's Exam Season !
From all of us at Edukatte, we wish you the very best of luck in your upcoming CXC exams! Stay focused, believe in yourself, and remember that all your hard work will pay off. You've got this!
Private Limited Companies
Learn about Private Limited Companies
Author:
Krish Beachoo
Edu Level: CSEC
Date: Jul 31, 2023
⏱️Read Time: 2 min
What are Private Limited Companies?
This is an incorporated business which has two to fifty members, with a common goal of making a profit. It is restricted to only family and or friends.
A Private Limited Company las some legal requirements when forming. The following documents must be submitted to the Registrar of Companies:
- Memorandum of Association
- Articles of Association
- Statement of Authorized Registered of Nominal Capital
(Find more info about these three documents in our POB Notebook!)
Characteristics of Private Limited Companies
- Capital is obtained from private individuals, financial institutions (eg. banks) and government agencies.
- Limited must be included in the name of the business.
- Shareholders have limited liability.
- Accounting statements are to be audited with a copy being sent to the Registrar of Companies.
What is the Registrar of Companies?
Simply put, this is a record of all the registered business (it is a government office/department).
The Pros and Cons
| The Pros | The Cons |
|---|---|
| Larger capital am ount than sole traders and partnerships. | Capital can be limited, as there is a limit of 50 persons. |
| Separate legal entity from owners. | Must file financial reports to Registrar of Companies |
| Shareholders have limited Liability | Shares are restricted to private persons (family and friends). |