Discuss the benefits of company (x) becoming a Ltd (private limited company)
A private limited company is when a business is no longer owned by a sole trader and individuals are able to invest into the business by buying shares. One way this would be beneficial for the business is that it provides the company with limited liability. This is good because it allows the business to protect personal assets and belongings, therefore if the business goes into debt or insolvency, only goods and capital owned by the business/ brand can be taken. This gives the individuals some personal security within running the business. However, within taking this approach to running the business it means losing some of the benefits of being a sole trader. There is now less control over the business decisions as an individual no longer overlooks all decision but everyone who has shares gets a say in the direction the business will take. This could affect how the business's ethos and direction grows as it could lead to shareholder conflict and potentially poor communication within the business.2 more points to discuss depending on whether it is an 8 mark or 12 mark essay question and a brief conclusion
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