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• Amin decided not to form a partnership with his uncle. Instead, five
years after setting up his business, he is thinking of forming a private
limited company. Amin would sell shares in his new company to friends
and relatives but he wants to keep most of the shares himself. He is
very busy repairing computers and fitting new computer systems for
the large number of customers who appreciate Amin's IT skills and like
the personal service that he offers. He wants to raise capital to pay for
a bigger workshop and two new vans. He plans to employ at least two
other engineers. Amin is also thinking of recruiting a manager to help
him deal with customers and the accounting side of the business. Amin
has been told that when he creates a private limited company his
'personal risk will be reduced but that he will still own most of the
business'.
1. Explain two advantages and two disadvantages to Amin of converting
his business into a private limited company.
2. Do you think that a private limited company is the appropriate form
of organisation for Amin's business? Justify your answer