ZIMSEC O Level Commerce Notes: Business Organisations: Advantages and Disadvantages of Private Limited Companies
- Operate as separate legal entities meaning:
- they can sue and be sued in their own name.
- Can make contracts in their own name.
- Shareholders enjoy limited liability.
- Can raise more capital by selling shares.
- There is continuity after the death of the owner.
- The founding members can retain control of the company without threat from takeovers.
- Financial statements are private and not published.
- There are a lot of legal formalities that have to be followed.
- Shares cannot be sold on the Zimbabwe Stock Exchange.
- Accounts must be audited yearly and it is expensive to employ an auditor.
- A copy of its accounts have to be submitted to the registrar of companies.
- The transfer of shares is limited.
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