A Private Limited Company is a type of business entity which is privately held. Here are some potential reasons for and against forming such a company:
WHY:
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Limited Liability: The shareholders’ liability is limited to their shares. This means personal assets of the shareholders are not at risk.
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Perpetual Succession: The company continues to exist even if the owner passes away or leaves the business.
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Separate Legal Entity: The company is considered a separate legal entity, distinct from its owners.
WHY NOT:
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Regulatory Requirements: There may be more regulatory requirements and administrative work.
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Less Flexibility: Decision-making might be slower due to the need for shareholder and director approval.
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Profit Distribution: Profits must be distributed as dividends among shareholders, which may be subject to tax.
Please note that the decision to form a Private Limited Company should be based on individual business needs and legal advice.
