20 Analyse why an entrepreneur might choose to set up a private limited company.

[Areeba Arshad]

[KN] A private limited company is a business owned by shareholders whose liability is limited to the amount they invest.
[APP] For example, an entrepreneur starting a clothing brand may register it as a private limited company to separate personal and business finances.
[AN] This protects the owner’s personal assets from business debts, which reduces personal financial risk and encourages greater investment and creates stability and continuity for long-term business growth, even if ownership changes.

[Tuqwa]

(KN)A private limited company is a business owned by shareholders with limited liability and separate legal identity from its owners.(app)An entrepreneur might choose to set up a private limited company because limited liability protects their personal assets from business debts, reducing financial risk. Another reason is continuity if one owner dies or leaves the business can continue as shares are transferred to others.(an)This gives the entrepreneur greater financial security and allows for long term planning and stability in the business.

[Daris]

KN: An entrepreneur might choose to set up a private limited company because it offers limited liability.
APP: For example, if the business faces losses or debts, the owner’s personal assets such as their house or car are not at risk.
AN: This protection reduces the owner’s personal financial risk, which gives them more confidence to invest larger amounts into the business. As a result, they can expand more safely and attract other investors who also feel secure about their money.

[Tahoor Yousaf]

{KN} Private limited companies tend to have limited liability which protects there personal assets incase of any buisness failure and full legal control and ownership of the buisn. {APP} for example if the owner dies it wont affect the buisness production the ownership will get transferred according to the heritage law and if buisn fails it wont have to pay from personal assets as it wont have anything do with it. {ANL} hence reducing the financial risk of the company from the owners shoulders leading to long term support and planning for the business which will help them pursue growth opportunities which will help business thrive.