Podcast
Questions and Answers
What are the disadvantages of a Private Limited Company regarding raising additional capital?
What are the disadvantages of a Private Limited Company regarding raising additional capital?
Cannot go to the general public for funds
How is decision-making affected in a Private Limited Company when many people are involved?
How is decision-making affected in a Private Limited Company when many people are involved?
Can take a longer time to reach decisions and take actions
What must a company do with their annual financial report in a Private Limited Company?
What must a company do with their annual financial report in a Private Limited Company?
Publish it with the Registrar of Companies
Why is it not easy for shareholders to sell their shares in a Private Limited Company?
Why is it not easy for shareholders to sell their shares in a Private Limited Company?
Signup and view all the answers
What is the main characteristic of Public Limited Company shares in terms of ownership?
What is the main characteristic of Public Limited Company shares in terms of ownership?
Signup and view all the answers
How are Public Limited Companies able to raise capital?
How are Public Limited Companies able to raise capital?
Signup and view all the answers
What is the main characteristic of a Private Limited Company in terms of its financing?
What is the main characteristic of a Private Limited Company in terms of its financing?
Signup and view all the answers
How many members must a Private Limited Company have by law?
How many members must a Private Limited Company have by law?
Signup and view all the answers
Why are shareholders more willing to invest in a Private Limited Company?
Why are shareholders more willing to invest in a Private Limited Company?
Signup and view all the answers
What is the legal requirement regarding the name of a Private Limited Company?
What is the legal requirement regarding the name of a Private Limited Company?
Signup and view all the answers
Why is continuity of business ensured in a Private Limited Company?
Why is continuity of business ensured in a Private Limited Company?
Signup and view all the answers
What is the role of the Registrar of Companies regarding Private Limited Companies?
What is the role of the Registrar of Companies regarding Private Limited Companies?
Signup and view all the answers
Study Notes
- Joint Stock or Limited Liability Companies: An association of individuals contributing capital for business operation, recognized as a separate legal entity.
- Types of Limited Liability Companies:
- Private Limited Companies: Financed through shares issued to family, friends, employees, and financial institutions. Shareholders have limited liability, must register with Registrar of Companies, minimum of 2 members, and accounting records must be kept.
- Advantages: Separate legal entity, more investors, limited liability, shared work and responsibility, and business continuity.
- Disadvantages: Cannot raise capital from general public, longer decision-making process, annual financial reports required, and difficulty selling shares.
- Public Limited Companies: Funded through borrowing, public offerings of shares, and retained profits. Shareholders have limited liability, a board of directors, and one vote per share.
- Shares: Units of ownership in a business.
- Ordinary Shares: Risk capital with variable dividends, holders have control and vote.
- Preference Shares: Fixed dividends and no control, holders have preference over ordinary shareholders.
- Debentures: Loans to the company with fixed interest rates, no ownership, and priority over shareholders.
- Public Limited Companies:
- Funded through various sources, limited liability, minimum of 2 members, and registered with Registrar of Companies.
- Advantages: Ability to raise large capital, easier borrowing, and potential for economies of scale.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Explore the characteristics and types of joint stock or limited liability companies. Learn about how these entities are recognized as separate legal entities and the differences between private limited companies and public limited companies.
