Advangtages and disadvantages of a Limited Company – a summary



Advantages and disadvantages of a Limited Company

Last week, we discuss the advantages and disadvantages of a Limited Company in details. Here is the summary for your clear understanding.


Involvement of considerable documentation and expenses in forming and maintaining a company. 

A company has to disclose certain information to the public. This happens by filing returns with the Companies Registry, such as personal particulars of shareholders, directors and secretary, and mortgage and transfer of shares. This means that the shareholders are the owners of the company. Also, the directors are the management personnel of the company.

Further, it is easy to transfer shares. The transfer of shares do not affect the management or disrupt daily operations Separate ownership and management: a company has the separation of ownership and management.


Limited liability.
Greater continuity: the liability of the shareholders for the company is limited to the amount of their respective shareholdings.
Easy to obtain finance: can easily create a “floating charge” to use to get loans from banks. This “floating charge” allows companies to use their assets for collateral to get loans. More demanding in complying with the Companies Ordinance.
Separate legal entity: a company is treated as a separate person and has the ability to buy property in its name, take legal action against others, etc., Also, a company can only be closed by liquidation.

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