1.2 Private Limited Company (LTD)

What suffix is required by law for private limited companies?

• Ltd

• PLC

• Corp

• Inc

Who can buy shares in a private limited company?

• General public

• Family and friends with consent

• Any online investors

• Foreign governments

What is the liability of shareholders in a private limited company?

• Unlimited liability

• Limited by guarantee

• Limited by shares

• No liability

What advantage does a private limited company have in terms of raising capital?

• Can issue shares publicly

• Government funding

• Unlimited shareholders

• Limited shareholders

What describes the legal status of a private limited company?

• Separate legal entity

• Partnership

• Non-profit organization

• Sole proprietorship

What is a disadvantage regarding the financial privacy of a private limited company?

• Public disclosure of financials

• No annual reporting

• Complete privacy

• Anonymous ownership

What is a limitation in terms of capital for private limited companies?

• Can sell shares without restriction

• Can raise unlimited public capital

• No limitations on capital

• Cannot issue shares publicly

How does the continuity of a private limited company get affected if a shareholder exits?

• No effect

• The company pauses operations

• It must re-register

• The company dissolves

What is a potential cost-related disadvantage when setting up a private limited company?

• No initial costs

• Automatic setup

• Lower taxes

• High setup costs