What are some of the advantages a business would have if it converts to a private limited company?
A private limited company or limited liability company is a business entity that offers almost all the legal liability protection benefits of a C corporation, without the added compliance and reporting burdens. There are many reasons why a company may convert from a regular C corporation to a private limited company, ranging from market forces to issues of management and organization. Some of the major advantages of a private limited company are:
- Limited amount of allowable shareholders
- Shares cannot be publicly traded
- Places pre-defined restrictions on share ownership
- Prevents hostile takeovers
- Flexible profit sharing
- Double taxation avoidance