Lamasat is an example of a Private Limited Company. Image credit

Lamasat is an example of a Private Limited Company.

ZIMSEC O Level Business Studies Notes: The Features of a 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.