Private Limited Company

A Private Limited Company is a legal entity that is created by way of registration as provided by the Companies Act.

Pros of Private Limited Company(PLC)

  • A PLC is a legal entity that exists separately from its owner(s)
  • The owners of the corporation enjoy limited liability. That is, owners of a PLC are not personally responsible for the debts of the PLC
  • Can sell stocks and bonds which can generate additional capital
  • The PLC can continue past the death of the owners
  • Ownership is easily transferable through the sale of stock
  • Fringe benefits

Cons of Private Limited Company

  • The primary disadvantage of the corporate form is double taxation: the PLC pays taxes on any income and then when the corporation pays dividends to the owners (the shareholders), they also pay taxes on those funds
  • Must file Article of Incorporation with the Registrar of Companies