I need a definition for a Private Limited Company

xxxtreme_bollox

I've looked at lot of books and found it very hard to find a concrete definition for Private Limited company. I could tell you about all it's characteristics and restrictions but I cannot get a definition from any of the books out there.

Anyone think they are up to it???

Nuttzz

wrote:

A company is a legal form of business organisation. It is a separate legal entity and, therefore, is separate and distinct from those who run it. The company (and not the individual shareholders) is the appropriate person to be sued in the event that debts are incurred by the company which remain unpaid, despite demand

from the cro, any use?

Our man in Havana

A Private Limited Company cannot sell shares to the public. I.e. it cannot raise capital from floating on the stock market. A public limited company can sell shares to the public. That is the main distinction.

Victor

it also has a limit to the number of sharholders it can have, 10 and 50 come to mind.

Our man in Havana

From cro.ie

There are a number of company types:

Limited company
The shares in a company are owned by its shareholders. If the company is a limited liability company, the shareholders' liability, should the company fail, is limited to the amount, if any, remaining unpaid on the shares held by them. A company is a separate legal entity and, therefore, is separate and distinct from those who run it. Only the company can be sued for its obligations and can sue to enforce its rights.

There are four types of limited company:


A private company limited by shares: The members' liability, if the company is wound up, is limited to the amount, if any, unpaid on the shares they hold. The maximum number of members is 50.

A company limited by guarantee not having a share capital: As this is a public company, there must be a minimum of seven members. The members' liability is limited to the amount they have undertaken to contribute to the assets of the company, in the event it is wound up, not exceeding the amount specified in the memorandum. If a guarantee company does not have a share capital, the members are not required to buy any shares in the company. Many charitable and professional bodies find this form of company to be a suitable vehicle as they wish to secure the benefits of separate legal personality and of limited liability but do not require to raise funds from the members.

A company limited by guarantee having a share capital: As will be a private company if the maximum number of members is 50. The members have liability under two headings; firstly, the amount, if any, that is unpaid on the shares they hold, and secondly, the amount they have undertaken to contribute to the assets of the company, in the event that it is wound up.

A public limited company: This company type must have a minimum of seven members. Their liability is limited to the amount, if any, unpaid on shares held by them. It should be noted that it is unlawful to issue any form of prospectus except in compliance with the Companies Acts 1963-2001. The nominal value of the companys allotted share capital must not be less than €38,092.14, at least 25% of which must be fully paid up before the company commences business or exercises any borrowing powers.
Single member company
A single member company is a private company limited by shares or a guarantee company having a share capital, which is incorporated with one member, or whose membership is reduced to one person. However, the company must have at least two directors and a secretary. The sole member, if he/she so decides, can dispense with the holding of General Meetings, including Annual General Meetings (AGMs). However, certain modifications laid down in the European Communities (Single-Member Private Limited Companies) Regulations 1994, have to be made. Also the accounts and reports that would normally be laid before the AGM of a company still need to be prepared and forwarded to the member.

Unlimited company
In an unlimited company, there is no limit placed on the liability of the members. Recourse may be had by creditors to the shareholders in respect of any liabilities owed by the company which the company has failed to discharge. Such company must have a minimum of two shareholders.

Hope that helps:)

blometjie

in relation to a private limited company does anyone know if there are any exceptions as to how a ltd company may sell shares to the public?? if there is no exception does anyone know the consequences? thanks a million

thecleverone

in relation to a private limited company does anyone know if there are any exceptions as to how a ltd company may sell shares to the public??

As you'll see from my explanation below of a private company, its not possible to offer shares to the public. Your suggestion above is kind of a contradition in itself as a company may be registered as a private company OR a public company, but you want to integrate the two? Would you not just set up a Public Limited Company instead of the Private Limited Company?

I've looked at lot of books and found it very hard to find a concrete definition for Private Limited company. I could tell you about all it's characteristics and restrictions but I cannot get a definition from any of the books out there.

The Investment Funds, Companies & Miscellaneous Provisions Act 2006 redefines what a "private limited company" is for the purposes of the Companies Act. It is a company that, under its Articles of Association, contains three requirements namely (1) its membership is restricted to 99 persons at most (excluding employees), (2) freedom to transfer its shares are restricted and (3) subject to qualifications, it may not invite the public to subscribe for any of its shares, debentures or other securities.

Hope this helps.

cosecretary

Section 33(1) of the Companies Act 1963 explains what is meant by the term a “private company”. Essentially, it is a company which has a share capital and which by its articles of association:-

(i) restricts its right to transfer its shares freely;
(ii) limits the numbers of its members (i.e. shareholders) to fifty (now ninety nine)
(iii) and
(iv) prohibits any offer to the public to subscribe for shares or debentures in the company

The most commonly formed company in Ireland is a private company limited by shares which means that the liability of the company’s members to contribute to the assets (or liabilities) of the company is limited to the amount, if any, unpaid on the shares for which they have subscribed.

blometjie

@thecleverone....
thanks for the input... i am however not attempting to set up a company (as of yet!)
my question comes as i am a college student currently in preparation for my final end of year exams and at the moment i am studying sample questions for company law...
the question which is posed to me is:
X Ltd was incorporated in 2002. the company has adopted Table A. the company has never held an AGM. Using statutory provisions and case law to support your answers advise the company:
a)in December 2008 the company advertised to the general public that 1000 new one euro shares were available at a first come first serve basis. Sammy was the only person to take up this share allotment and was subsequently registered in the register of members. Sammy later sold the shares to Jimmy, an existing member with the other members consent. the directors refuse to register the transfer of shares. Jimmy threatens legal action....
now i in no way want anybody to answer the question for me... but this is where my confusion comes in... how was the transfer of shares successfully registered as surley Sammy is a member of the public? and how then can Jimmy enforce any rights as Sammy wasn't really a shareholder to begin with as there was a major breach of the Principal Act...
again guys any ideas you can throw at me will be really appriciated
thanks again:D

blometjie

bump! anyone who has an idea will be of help... i asked the lecturer and instead of helping she said it was too obvious and simple to tell me...:eek:

gnxx

This is my understanding.


The key difference between private and public, is that public companies offer shares on a stock exchange. There is no restriction on who the purchaser is/maybe.

Within a private company, shares can be sold/transfered etc to any member of the public, normally with the company taking the initiative. The shareholders agreement normally dictates conditions related to transfer/selling to existing or new share holders.

Hope this helps.

blometjie

gnxx wrote: »

This is my understanding.


The key difference between private and public, is that public companies offer shares on a stock exchange. There is no restriction on who the purchaser is/maybe.

Within a private company, shares can be sold/transfered etc to any member of the public, normally with the company taking the initiative. The shareholders agreement normally dictates conditions related to transfer/selling to existing or new share holders.

Hope this helps.

thanks a million... it helps more than you know!! it really was so obvious that i just looked past it! your a star thanks a million xx