The Advantages and Disadvantages of a Private Limited Company

////The Advantages and Disadvantages of a Private Limited Company

The Advantages and Disadvantages of a Private Limited Company

Lamasat is an example of a Private Limited Company. Image credit topnews.co.zw

Lamasat is an example of a Private Limited Company. Image credit topnews.co.zw

ZIMSEC O Level Business Studies Notes: The Advantages and Disadvantages of a Private Limited Company

  • A Private Limited Company has several advantages and disadvantages:

Advantages

  • The shareholders have limited liability.
  • There is continuity after the death of a member.
  • Are not required to publish their private accounts.
  • More capital can be raised.
  • There is more scope for expansion.
  • Because sell of shares is limited there is no risk of hostile takeovers or loss of control.

Disadvantages

  • Decision making is much more complex and convoluted.
  • Cannot sell their shares publicly so the amount of capital that can be raised is limited.
  • Shareholders cannot freely sell their shares without consulting with other shareholders.
  • Have to share profit among shareholders
  • The procedure to form these is more complex.
  • There is the possibility of double taxation

To access more topics go to the O Level Business Notes page.

By |2017-01-17T11:15:55+00:00January 31st, 2016|Notes, O Level Business Studies Notes, Ordinary Level Notes|1 Comment

About the Author:

He holds an Honours in Accountancy degree from the University of Zimbabwe. He is passionate about technology and its practical application in today's world.
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