Private Limited Company (Ltd)

Shares are owned privately (i.e. not available to the public on the Stock Market)
It has a minimum of 1 stockholder
Owned by shareholder(s) and run by a director or a board of directors
The company has to produce a Memorandum of Association and Articles of Association
1. That state the company's details, responsibilities of directors and shareholders' rights
They tend to be family businesses
Finance
Attachments:
- Sources of finance
1. Company profits from previous years
2. Inviting a new shareholder to join
3. Bank loan
4. Bank overdraft
5. Government grants
6. Trade credit
7. Debt factoring
Advantages
1. Shareholders have limited liability
2. Control of company not lost to outsiders
3. More finance can be raised from shareholders and lenders
4. Significant experience and expertise from shareholders and directors
Disadvantages
1. Profits shared amongst people
2. There is, as with a partnership, a legal process in setting up the company
3. Shares cannot be sold to the public therefore finance is more difficult than for a public limited company
4. Firm has to abide by requirements of the Companies Act
5. Scottish-based firms must provide Companies House in Edinburgh with a copy of the annual accounts. They are available to anyone who requests a copy
Objectives
1. To maximise profits
2. To grow
3. To have a strong status
4. To have the highest possible sales revenue

Resource summary

	Created by stewart_megan23 almost 11 years ago