In Ethiopia, Private limited companies have increased in number, size and complexity and theyrnrequire more complex organizational structures and a more diverse workforce possessing var iousrnlevels and areas of expertise. In light of internationally recognized best practices and principles ofrncorporate governance and ba sed on the available data and literature, this paper attempts to show therndeficiency of the Commercial Code in addressing current issues in corporate governance of privaternlimited companies related to absence board of directors in the governance structure, conditionalrnordinance of shareho lders meeting and auditors appointing, the minimum two person mandatoryrnrequirement for the format ion of such compan ies and issues regarding contlict of interest. Thernsketchy nature of the provisions of the Commercial Code that govern private limited companies andrnlack of reference to sha re companies' provisions worsen those problems.rnAccordingly, the paper provides crucial recommendations based on internationally recognizedrnprinciples and practices of co rporate governance of private limited companies as they are expectedrnto address the basic governance problems of Eth iopian private limited companies. The writerrnrecommends that it is essential to formulate the contemporary corporate governance rules to thernprivate limited companies in Ethiopia particularly making board of directors compulsory to therngovernance of such companies. Making private limited companies to have a governance board thatrnshould have an appropriate mix of knowledge, skills and experience is very vita l to make privaternlimited companies effective and value add to the country's growth.