1. Do I really need a private limited company?
The majority of businesses are not a private limited company. The reasons for
having a company are varied, for example, it could involve ownership of property,
obtaining investment funds, taxation or contractual relationships. Many businesses
function satisfactorily as sole traders or partnerships.
The key point to recognise is that a private limited company is a separate
entity. This means that it is a legal person in its own right. It is separate
from those who own or run it, and has 'limited liability'.
2. What does limited liability mean?
Limited liability gives the owners of the company (its shareholders)
protection if the company fails.
This means that if a private limited company is put into liquidation, the people who own the company will only be required to pay what they have already paid or agreed to pay towards settling its debts.
3. How do I set up a private limited company? If you decide, maybe after taking professional advice, that a private limited company is the best thing for your business, you can buy a ready-made company from a company incorporation agent. Alternatively, you can incorporate a company yourself.
4. What can I do with an unwanted private limited company?
If you decide that you do not need a private limited company that
you have set up, you should consider putting it into voluntary liquidation.
If the company cannot afford this, you may be able to apply for it to be
struck off the register.