A private company is a type of business organization
with a range of membership from two to fifty and each member is liable to the
tune of the nominal value of the shares he holds in the company. As a result of
this, the private company is a limited liability company and this is the major
advantage over partnership business enterprise.
Features Of
Private Limited Liability Company
1.
The formation is
quite easy, i.e. but needs just two or more people not exceeding fifty in
number.
2.
It enjoys limited
liability rights and has a decisive advantages over partnership business
organization
3.
It is compulsory
on a private company to submit audited accounts for the interest of the public
4.
Shares of a
private company are not transferable except with the general consent of other
share holders
Advantage Of Private Limited Liability Company
1.
Since a private
company is a limited liability company it enjoys the full rights of limited
liability company (i.e. in case of debt settlement by the company, the private
personal assets of members are not tampered with).
2.
Private company
can with full privileges afford a couple being or making up the board of
director of the business.
3.
Legal
restrictions are limited because it does not require the company issuing
company prospectus.
4.
There is
continuity of the company even with the death of a shareholder.
Disadvantages
of Private Limited Liability Company
1. A private company cannot offer its shares for sale to
the public by a rule and therefore cannot appeal to the public to increase its
share capital.