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What is Private Limited Company?
If you are planning to start your business in the UK, you must have this question in mind that what is private limited company.Well, you will find the answer to this question in the following information. A private limited company is a company that is limited in its shares and it cannot be publicly traded. This type of company can easily be formed online or through the Companies House. Moreover, the inclusion of the third party can also help in the formation process.
Advantages of a private limited company: There are a lot of advantages due to which you can prefer forming a private limited company. The advantages of a private limited company are as follows: One of the biggest advantages of a private limited company is that you will be able to protect yourself from the personal liability i.e. in the case of any failure or the loss of the company, the owner will not be held responsible for managing the finances from the personal resources. The next advantage of a private limited company is that it is a legal entity which means that the company will have its own rights and the finances of the company are separate from the owner’s finances.
The addition of credibility is the next advantage anyone can have if they are planning to form a private limited company. The increase of credibility will help the company in borrowing money and in raising capital for facing financial issues and risks.
The next advantage is that the customers and clients may feel much confident while dealing with a private limited company. Due to the increased credibility, they may perceive the company as much reputable and reliable. The relationships between the members of a private limited company are regulated as it has a constitution i.e. article of association. Due to this constitution, the shareholders and the directors remain in a regulated and healthy relationship. The lifespan of the private limited company is indefinite which means there are no chances that it will get closed after some years of working. The owners will continue to work for it until and unless they decide to dissolve the company. A business owner can have a lot of tax benefits if they are forming a private limited company. The structure of a private limited company is quite favorable for the creation of profit and non-profit entity.
Requirements for the formation of a private limited company: The answer to the questionwhat is private limited companyincludes the documents or also the things that are required for the formation. Major requirements for a private limited company includes the following: Name of the company: Before forming a private limited company, the owner must make sure that the name is specified for the company. However, make sure that the name of the company must not match the name of an existing company in the country. After deciding the name, make sure that you include the company type at the end like ‘limited’ or ‘Ltd’. There are some scenarios in which the Companies House may refuse the registration of a private limited company. These include the following: When the name of the company is offensive
If the name shows some connection with the local government or some public authorities.
If the name has some sensitive word or expression in it.
If the name of the company includes banned signs, characters or symbols. If the name of the company is confusing or misleading. A registered office: The private limited company must have a registered office with the registered address. All the communications and correspondences will be done on this address by the clients or the higher authorities.
The above information clearly stated the answer to the questionwhat is private limited company?Further, the person who is forming a private limited company must register it first according to the processes that are specified by the government of the UK. The registration can be done online or through the post. All the owner needs to do is to have all the required documents.