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Advantages of private limited company

Answer Text:
Advantages of private limited company
i) Formation: The Company can be formed more easily than a public company. The cost of information is less than that of a public company
ii) Legal personality: A private company is a separate legal entity from its owners. Like a person, it can own property, sue or
be Sued and enter into contracts
iii) Limited liability: Shareholders have limited liability meaning that they are not responsible for the company’s debts beyond the amount due on the shares
iv) Capital: They have access to a large pool of capital than sole proprietorship or a partnership. They can borrow money more easily from financial institutions because it owns assets which can be pledge as security
v) Management: A private company has a larger pool of professional managers than a sole proprietorship or a partnership. These managers bring in professional skills in their own areas which are of great advantage to a private company
vi) Assured continuity of the business: Death, bankrupty or withdrawal of a shareholder does not affect the continuity of the company
vii) Trading: Unlike a public company a private company can commence trading immediately upon receiving a registration certificate.