By … 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. December 17, 2020. Pros and Cons of a Private Limited Company Pros Limited Liability. 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. However, operating as a private limited company is not ideal for all businesses, especially micro or small enterprises. The 4 disadvantages of a private limited company: An up to date guide. Hence, registering a private limited company involves a process and costs which are not applicable to an unregistered entity like proprietorship. 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. To find out more about the advantages and disadvantages of a Private Limited Company, please get in touch. Private Limited Companies enjoy the advantage to carry out legal proceedings and to bring a suit in the court of law. Therefore, the financial and managerial resources of a private company are comparatively limited. Advantages and Disadvantages of Setting up a Private Limited Liability Company. 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. Smaller resources: A private company cannot have more than fifty members. Disadvantages of Private Limited Company. Disadvantages of a private limited company There are some disadvantages of a private limited company of which you should be aware. Failure to fulfil these duties can lead to a fine or, in severe cases, a prison sentence. Advantages and Disadvantages of Setting up a Private Limited Liability Company. The advantages include tax efficiency, separate entity and professional status. Limited Company Accounting & Resources 5 advantages of a limited company. A private company suffers from the following limitations: 1. In a private limited company the number of members in any case cannot exceed 200 . 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. Some disadvantages include complex accounts, public records and accountant fees. 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. Its credit standing is lower than that of a public company. 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