Private Limited

Company

Forms of Business Ownership

 What is a Private
Limited Company?
A private limited company is where between
one and ninety nine people come together and
form a business
The owners are called shareholders and they
invest money in the company
The profit is divided up among the shareholders
and distributed in the form of dividends
“Ltd.” is written after the name of the company
The annual accounts are sent to the Registrar
of Companies. They are not published
Advantages of a Private
Limited Company
Shareholders have limited liability

Extra capital is available to fund

expansion of the business

Continuity of existence
 Disadvantages of a
Private Limited Company
Costly to set up
A lot of legal requirements when forming
a company
Shares cannot be transferred to the
general public
 Forming a Private Limited Company

Promoters Now the

company can
Hire… begin trading
Certificate of
Solicitor
Promoters Incorporation

Who completes… Sent to…

Form A1 Companies
Memorandum of Association Registration
Articles of Association Office (CRO)
 Shareholders The owners of the
company (1-99)
Elect…
The people elected to run
Board of Directors the company (max. 12)
Appoint…
The MD/CEO runs the
Managing Director/ company on a daily basis with
Chief Executive Officer the assistance of the department
managers
IT Marketing Finance Production
Manager Manager Manager Manager
 Forming a Private
Limited Company
You need 1 – 99 people who invest money
and are shareholders
The people involved in forming a company
are called the promoters
The promoters employ:
 An accountant – for financial advice
 A solicitor – to prepare the legal documents which
must be sent to the Companies Registration Office
(CRO)
What documents must
be filled out?
Memorandum of Association – sets out the relationship
of the company to the general public, i.e. rules and
regulations governing how the company deals with the
public
Articles of Association – sets out the internal rules and
regulations of the company, e.g. shareholders voting
rights, how directors are elected, powers and duties of
the directors
Form A1 – sets out the details of the company, it’s
directors and their signatures (Declaration of
Compliance with the Companies Acts 1963 – 1990)
These documents are sent to the Registrar of
Companies
The Registrar will check to see if they are all
in order
If so, a Certificate of Incorporation is issued
 This is the birth certificate of a company
 It has a separate legal existence from its owners
 The shareholders have limited liability
 The company can sue and be sued in its own
name
Memorandum of Articles of
Association Association

Form A1
 Board of Directors
When the company is incorporated it
will hold a meeting of its shareholders
who elect a board of directors to run the
company on a day-to-day basis
They report to the shareholders
annually on the performance of the
company at the Annual General Meeting
(AGM)
 Summary
What is a private limited company?
How do you know if a business is a private
limited company?
Can you list three advantages and three
disadvantages of operating as a private limited
company?
What documents are needed to form a private
limited company?
What is the certificate of incorporation?
What do the board of directors do?
What is an AGM?