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Outline four advantages and four disadvantages of private limited company.

Outline four advantages and four disadvantages of private limited company.

Answers

Simon
Advantages.
• The procedures and cost involved in formation of a private limited company is less than in public company.
• The death of a shareholder in a private company does not affect the company.
• A private company has access to a large pool of professional managers than a sole proprietorship or partnership.
• A private company has access to a large pool of capital than sole proprietorship or partnership.
• A private company can commence trading immediately it is corporatedunlike a public company.
Disadvantages.
• The shareholders in a private company do not have direct control over the business.
• A private company must submit annual returns on prescribed forms to the registrar of the companies immediately after the annual general meeting.
• A private company cannot invite the public to subscribe to its shares like a public company.
• A private company can only carry out the activities spelt out in the objects clause of the memorandum of association.
• There is slow decision making as major decisions requires the sanctions of shareholders who may take time before they meet.
skilled writter answered the question on May 15, 2018 at 05:50

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