A Private Company Limited by Shares (LTD) is a business structure where owners have limited liability protection and ownership is divided into shares that cannot be sold to the public.
A Private Company Limited by Shares operates as a separate legal entity from its owners.
Shareholders own portions of the company through shares, whilst directors manage day-to-day operations.
The company can enter contracts, own assets, and take on debt independently.
The primary advantage is limited liability protection, meaning shareholders typically only risk their investment amount.
Private Companies Limited by Shares also offer tax efficiency opportunities and enhanced credibility with suppliers and customers.
Additionally, ownership can be easily transferred through share transactions.
Any individual or corporate entity can own shares in a Private Company Limited by Shares.
However, shares cannot be offered to the general public or traded on stock exchanges.
Most Private Companies Limited by Shares have restrictions on share transfers in their articles of association.
A Private Company Limited by Shares must have at least one director and one shareholder (who can be the same person).
The company requires registered office address, articles of association, and annual filings with the relevant company registry.
Share capital must be clearly defined and allocated.
Unlike sole traders or partnerships, a Private Company Limited by Shares provides limited liability protection.
Compared to public companies, Private Companies Limited by Shares cannot raise capital from public investors.
They're also distinct from companies limited by guarantee, which don't have share capital.
Private Companies Limited by Shares must file annual returns and accounts with the company registry.
They need to maintain statutory registers, hold annual general meetings (where required), and ensure compliance with corporate governance requirements.
Directors must also fulfil their fiduciary duties.
Yes, Private Companies Limited by Shares can raise investment from private investors, venture capitalists, or through issuing new shares to existing shareholders.
However, they cannot publicly advertise share offerings or list on stock exchanges without converting to a public company structure.
