Private Limited Companies
A private limited company is owned by shareholders. Shareholders means people who own ‘part’ of the business. The ‘part’ they own is called a ‘share’. In a private limited company shares are sold privately – that is, they are not openly offered to the public. They are often sold to family and friends.
A private limited company is signified by the letters Ltd.
Advantages
Private limited companies have limited liability which means that the owners can only lose the value of the shares they have purchased. This makes it easier to attract people to invest in the company.
Disadvantages
There are more formal steps when forming a private limited company. For example, the owners must submit information to the Registrar at Companies House in Cardiff. The two documents that need to be completed are the Memorandum of Association and Articles of Association.