Question

Explain in brief the privileges of a private company.

Answer 1

A private limited company enjoys the following privileges:

1. Ease of Formation: A private company can be created by only two persons. It can begin operations immediately after incorporation and does not need to wait for the certificate of starting a business.
2. Greater Flexibility: Private companies require fewer legal requirements than public companies. It has particular exclusions and benefits under the company laws. Private companies have more flexibility in their operations.
3. Quick Decisions: In a private company, there are fewer people to consult. People from a private firm include family members, relatives, and close friends. They can make rapid decisions.
4. Secrecy: Private companies do not need to disclose their accounts or file several documents. As a result, it can better protect commercial secrets than a public corporation.
5. Continuity of Policy: The same persons manage the affairs of a private corporation. Their close relationship ensures policy continuity.
6. Limited Liability: The liability of members in aprivate company is limited.
7. Personal Touch: Private companies provide a more personalised experience for both staff and clients. The lack of separation between ownership and management creates a strong incentive for hard work and innovation in corporate management.