WHY PRIVATE LIMITED COMPANY? OR WHY NOT

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:

• Limited Liability: The shareholders’ liability is limited to their shares. This means personal assets of the shareholders are not at risk.

• Perpetual Succession: The company continues to exist even if the owner passes away or leaves the business.

• Separate Legal Entity: The company is considered a separate legal entity, distinct from its owners.

WHY NOT:

• Regulatory Requirements: There may be more regulatory requirements and administrative work.

• Less Flexibility: Decision-making might be slower due to the need for shareholder and director approval.

• 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.