LTDs

• what is a private limited company?

  an incorporated business that is owned by private shareholders and where shares cannot be sold on the stock market

  
  

  small number of shareholders

  ran by directors

  could be a global or family business
• how to become an LTD?

  • all documents are filed with companies house
  • memorandum of association (basic details)
  • articles of association (internal rules)
  • issued with a certificate of incorporation
• LTD vs unincorporated

  • advantages:
  • limited liability
  • access to more finance
  • control shareholders
  • tax advantages
  • disadvantages:
  • loss of control
  • conflict
  • slow decision making
  • loss of ownership (split profits)
  • difficult for shareholders to leave, puts them off in the first place
  • finances are not kept private
• LTD vs PLC

  • advantages:
  • fewer shareholders
  • more control
  • easier to focus on preferred objectives
  • more privacy
  • disadvantages:
  • harder to raise large amounts of capital
  • harder for shareholders to exit
  • harder to have an employee share ownership scheme