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
Hire…
Solicitor
Promoters
Who completes…
Form A1
Memorandum of Association
Articles of Association
Now the
company can
begin trading
Certificate of
Incorporation
Sent to…
Companies
Registration
Office (CRO)
Shareholders
The owners of the
company (1-99)
Elect…
Board of Directors
Appoint…
IT
Manager
The people elected to run
the company (max. 12)
The MD/CEO runs the
Managing Director/
company on a daily basis with
Chief Executive Officer the assistance of the department
managers
Marketing
Manager
Finance
Manager
Production
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
Association
Articles of
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?