EnglishA Private Limited Company is formed lawfully with Limited Liability or Legal Protection for its shareholders but that places restrictions on its ownership.
A Private Limited Company is a company which is privately held for small businesses. The liability of the members of a Private Limited Company is limited to the number of shares respectively held by them. Shares of Private Limited Company cannot be publicly traded.
Private Limited Company is the simplest and a very popular form of Business Registration in India. It can be registered with a minimum of two people. Limited liability protection to shareholders, ability to raise equity funds, separate legal entity status make it the most recommended type of business entity for millions of small and medium-sized businesses that are family-owned or professionally managed.
Following are the disadvantages of a private limited company:-
- One of the main disadvantages of a private limited company is that it restricts the transfer ability of shares by its articles.
- In a private limited company the number of members, in any case, cannot exceed 200.
- Another disadvantage of a private limited company is that it cannot issue a prospectus to the public.
- In the stock exchange shares cannot be quoted.
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