Explain three characteristics of a private limited company
ANSWER
Under the provisions of the Companies Act, a private company is any company whose articles of association:
• Limit the number of members to 50 excluding current and former employees who are members.
• Restrict the right to transfer its shares.
• Prohibit any invitation to the public to subscribe for its shares or debentures.
Other Characteristics include:
• Has at least one director.
• Entitled to commence business from the date of incorporation.
• Not obliged to hold the statutory meeting.
• Not obliged to publish accounts.