A company is a separate legal entity which is formed to facilitate the carrying on of business or to hold property or other assets. The vast majority of limited companies used in business are private limited companies.

Most private companies are required to have two or more members(shareholders). However, it is possible for a private limited companies to have a minimum of only one member by suitable application to the Registrar of Companies. Either structure must have at least two directors and a company secretary.

A private limited company must have a share capital and it may have up to a maximum of 50 members. However, it cannot invite the general public to apply for the shares in its capital.

The shareholders, that is, the owners, of a private limited company are only liable for the company’s debts and obligations up to the amount which they have contributed, or have agreed to contribute, to the shares of the company.

The right of members to transfer their shares is restricted in a private company. A private company (with certain exceptions) are obliged to have the word “limited” after their name.