A private limited company is a business entity owned by a small group of shareholders. This type of company is not listed on a stock exchange and is not available for public investment. Private limited companies are typically smaller businesses, and they often have a close relationship with their shareholders. Contact Pembroke Pines Accounting services, who will guide you through the steps of setting up a private limited company.
Advantages of setting up a private limited company
There are many advantages of using a private limited company, including:
- Limited liability
The most important advantage of a private limited company is the limited liability of shareholders. The shareholders are not liable for the company’s debts to the extent of their investment in the company. The liability of shareholders is limited to the face value of their shares.
- Separate legal entity
A private limited company has a separate legal entity. It means that the company has a separate legal existence from its shareholders. The company can enter into contracts and can sue and be sued in its own name.
- Flexible ownership structure
A private limited company can have any number of shareholders, which makes it easy to raise capital by selling shares.
- Tax advantages
A private limited company can claim certain tax advantages, such as offsetting losses against profits for tax purposes.
- Increased credibility
A private limited company is often seen as more credible than a sole proprietorship or partnership. This can make it easier to win customers and business partners.
- Attractive to Investors
A private company is more attractive to investors than a sole proprietorship. Investors are attracted to private companies due to limited liability.
- Ease of Formation
A private limited company can be formed with fewer members. Only two members are required for the formation of a private limited company.
- Secrecy of Business
In a private limited company, the disclosure of the identity of the members is not essential. So, the affairs of the company are conducted with secrecy.
- Perpetual succession
A private limited company has perpetual succession. The members of the company can continue the business of the company even after the death of the members.
- Limited government control
A private limited company is not subject to the control of the government. The members of a private limited company can manage the affairs of the company without the interference of the government.