Private limited company is a type business formation used by many businesses all around the world. When there are considerable amount of liabilities or risks involved, business owners prefer private limited liability company registration.
What is a private limited company?
Private limited company is a type of a business formation that’s used by majority of the businesses all around the world. Business owners choose private limited company based on the risk associated doing business. The limited segment of private limited company represent the limited liability that business owners have for the company.
Because of that, the liability of the business owners are limited only to the invested capital unlike in sole proprietorship businesses. Private limited company businesses formation type allows businesses to operate as a separate legal entity in the registered jurisdictions.
A private limited company can have one or more share holders. The majority share holder of the company is often known as the chairman of the company. In a private limited company, there are other designations such as CEO, COO, director and etc… And that’s quite normal to see in a private limited company because of the operation complexity and business management requirements.
Pros and cons of limited liability company
With great benefits offered by private limited company, there are few downsides too.
Pros
- Limited liability.
- Easy to manage.
- Easy to develop professional perception.
Cons
- High registration fees.
- Complex operational practices.
- More documentation requirements.
