What is PRIVATE LIMITED COMPANY?

A company whose shareholders are offered limited liability. However, ownership restrictions are strictly in place to avoid the hostile takeover attempt by any association or bylaws. The restrictions include (1) The sale or transfer of a shareholder’s share must be first offered to the other shareholders (2) The shareholders cannot sell their shares on the stock exchange to the public, (3) A fixed number of individuals are considered to be shareholders.

TLD Example: Unlike shareholders in a publicly traded company who can sell their shares without restriction, the private limited company enforced a right of first refusal clause on its shareholders.

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