Private Limited Company

• These are closely held limited liability companies usually owned by friends and family.
• A private limited liability company is treated as a separate juristic person
• This means it can sue and be sued in its own name and
• it does not cease to exist upon death of one of its shareholders.
• The number of shareholders is limited from 2-50 and
• The sale of shares on the private on the Stock exchange is prohibited.
• Shareholders’ right to sell shares is limited.
• Shareholders can operate the company themselves or
• They can elect a Board of Directors during the Annual General Meeting (AGM) to operate the business on their behalf.
• The name ends with the words Private Limited Company (PVT LTD) or some other equivalent words,
• Its affairs are governed by the Memorandum and Articles of Association,
• It is registered under the Companies Act

NB Visit this page to view the advantages and disadvantages of a Private Limited Company.

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