Private Limited Company

A Private Limited Company is a type of company that can be formed when setting up a business. Being a limited company, once properly registered with companies house, the private limited company will be deemed in law as being a legal entity separate from its members (shareholder/directors). Most commonly the directors are the main shareholders of the company and thus the control of it will remain with them. This is appealing to most people wishing to start a private limited company and maintain control of their business.

Due to its nature, a private limited company is setup by the sale of shares. It cannot however, sell shares to members of the public in order to raise further capital for the business. To do so would require the creation of a Public Limited Company (PLC) which is permitted to trade shares on the stock market.

Why Setup a Private Limited Company?

Setting up a private limited company can be advantageous in most cases as they can be created with just one member and run as such. This means formation is simple and so is the management. Generally people are put off forming a private limited company because they think that the formation and management is more complex and costly than the other forms of business. Research will show that this is not the case. Although private limited companies are more strictly regulated, with our low cost company formation service, they are extremely easy to set up.

Clearly one of the main benefits of a private limited company isthe benefit of limited liability. This means that the shareholders who initially invest in the company are protected. They will only be liable up to the sum of that investment and no more. You can see more of the advantages and disadvantages of a limited company by taking a look at our blog article.

In trading a Private Limited Company can used ‘Ltd’ or ‘Limited’ as part of its trading name, this gives an element of professionalism to even the smallest company. Search for your ideal company name with our Company Name Search tool to ensure it isn’t already in use.