What is a major disadvantage of starting a private limited company?

Starting a private limited company involves a significant amount of time and financial resources, making the process quite demanding. This includes the need to register with the relevant governmental authorities, prepare legal documentation such as articles of association, and potentially incur costs for professional services like legal and accounting advice. These factors contribute to the time-consuming nature of establishment.

Once registered, the company also faces ongoing compliance obligations, such as filing annual returns and financial statements, which add to both the complexity and costs associated with maintaining the business structure. These demands can be particularly burdensome for first-time business owners who may already be managing other startup challenges.

In contrast, options related to unlimited liability or complete anonymity do not apply to private limited companies, as owners generally benefit from limited liability, meaning their personal assets are protected from business debts. Similarly, the ability to raise finance is typically more limited in private limited companies compared to public limited companies, as they cannot sell shares to the public.