Private limited company: GCSE Business Definition

What is a private limited company?

In GCSE Business, a private limited company does not issue shares to the public. Its owners, known as shareholders, are usually the business founder, their friends and family or private investors. Shares in private companies may be sold privately or are commonly passed to family members upon retirement or death.

Private limited companies can have just one shareholder. They are often established as an alternative to operating as a sole proprietor by entrepreneurs to reduce their personal financial risk. This is because shareholders enjoy the benefit of limited liability for business debts.

Most private limited companies are small to medium-sized, though there are some well-known examples of large private limited companies, such as Frasers Group, the owner of brands including Sports Direct and Debenhams. 

Private Limited Company Revision Resources to Ace Your Exams

Save My Exams has a great range of resources to explore the topic of private limited companies further. 

Read our GCSE Business revision notes on types of ownership, including private limited companies, or test your knowledge of private limited companies in our exam questions to improve your grades. 

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