Disadvantages of a private company
Answer Text: Disadvantages of a private companyi) Returns: A private company, unlike sole proprietorship or a partnership, must submit annual returns on prescribed forms to the registrar of companies immediately after the annual general meetingii) Capital: A private company cannot invite the public to subscribe to its shares like a public limited company. It therefore limited access to a wide source of capital.iii) Share transfer: The law restricts the transfer of shares to its members/shareholders are not free to transfer their sharesiv) Decision making is slow as they must consult all shareholders.v) The management of the private limited company is left on the hands of the professionals hence alienating the shareholders.
Get premium membership