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Edu Level: CSEC
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). |
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