Limited Companies – At a Glance

A Limited company is a different kind of company that can be formed according to the government law. In this case, the liability of the subscribers or members of the company is limited only to what they have guaranteed or made as investment at the time read this artile on limited company startups of formation of the company.

A Limited firm has two types; it can be formed either as a Private or Public ltd company. In the former case, all who wish to become members or subscribers of the company are restricted by the Company Act. But in the latter case, anyone can become a member by purchasing the Shares of that firm.

Private limited firms are also of two types. The first one is a Private ltd company by guarantee and the second one is a Private Limited firm by shares. In case of a private limited firm by guarantee, there is no share capital. But there is a guaranteed amount by the members or subscribers of the company which comes into play at the time of the company’s liquidation. This kind of firm is generally suitable for charitable organizations.

In the case of a limited Private company, though it has shares, but an ordinary person cannot buy the shares of a private ltd firm, as the shares in such a firm are restricted only to the members or subscribers of the company. If any of the members of the firm wants to sell the shares then he or she has to first discuss with the fellow members before selling the shares to any third party.

 

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