What is Private Limited Company?
A private limited company is a privately held business entity held by the group of small private stakeholders. It is a type of privately held small business, in which owner liability is limited to their shares and shares are prohibited from being traded. It is a legal entity separate from its owners. In Private Limited Company, ownership is divided into shares, and shareholders are not personally liable for the company`s debts beyond their share capital contributions. The company exists as a separate legal entity, which allows it to own assets, enter into contracts, and conduct business independently of its owners. It is managed by directors and governed by its articles of association. This structure is commonly used by startups and small to medium-sized enterprises (SMEs) because it combines operational flexibility with legal protection, credibility, and potential tax advantages.