The advantages include tax efficiency, separate entity and professional status. In case the private limited company has debt and losses, the only liability by the shareholders is only up to the amount they individually invested. Disadvantages of a Private Limited Company: One of the main disadvantages of a private limited company is that it restricts the transfer ability of shares by its articles. Advantages and Disadvantages of Setting up a Private Limited Liability Company. In a private limited company the number of members in any case cannot exceed 200 . Disadvantages of Private Limited Company. However, operating as a private limited company is not ideal for all businesses, especially micro or small enterprises. There is more paperwork and time associated with running a limited business than when operating as a sole trader, which can be off-putting for some. A complete breakdown of limited company advantages and disadvantages. Therefore, the financial and managerial resources of a private company are comparatively limited. Disadvantages of Private Limited Company • Registration Process Private limited company registration on average takes about 10 – 20 days and costs Rs.13000 (all inclusive) through STARTUPEDGE.IN. Advantages and Disadvantages of Setting up a Private Limited Liability Company. Pros and Cons of a Private Limited Company Pros Limited Liability. The limited company business structure is the second most popular in the UK. Failure to fulfil these duties can lead to a fine or, in severe cases, a prison sentence. Just like any other type of person, a company being an independent legal entity, can initiate legal action against any other person and similarly can be sued in the court of law. As the director of a Private Limited Company, you will also have a number of legal duties, including an obligation to safeguard the company’s assets. Private limited company is an ideal business entity for a majority of medium and large sized business, as it offers a host of advantages from liability protection to easy transferability. The 4 disadvantages of a private limited company: An up to date guide. December 17, 2020. Its credit standing is lower than that of a public company. To find out more about the advantages and disadvantages of a Private Limited Company, please get in touch. Hence, registering a private limited company involves a process and costs which are not applicable to an unregistered entity like proprietorship. Their personal assets, the salary earned as an employee of the company, real estate properties, etc. Private Limited Companies enjoy the advantage to carry out legal proceedings and to bring a suit in the court of law. 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