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Which of the following is an advantage of operating a business as a private limited company?
a. It is easier to raise finance as the business can sell shares
b. Owners have unlimited liability
C. Partners can provide specialist knowledge and skills
d. It is very quick and easy to set up

Sagot :

Lanuel

Answer:

a. It is easier to raise finance as the business can sell shares.

Explanation:

A private limited company can be defined as a type of legal hybrid-business structure that can combine both partnership and corporation form of business, and the owners are only responsible for its debts with respect to the amount of capital they have invested.

Some of the characteristics (features) of a private limited company include;

I. Shares can be issued by the private limited company to raise capital.

II. All the shareholders (owners) of a private limited company have limited liability.

III. After the death of a shareholder, a private limited company will continue to operate its business.

An advantage of operating a business as a private limited company is that it is easier to raise finance as the business can sell shares.

However, one of the disadvantages of a private limited company is that the general public are able to view a summary of their business accounts.

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