Limited Company Overview

A company structure where the owners are legally separate from the business. This means the business can own property, enter contracts, and be sued independently of its owners.

The owners of a limited company are only financially responsible for the amount they invested in the business. Their personal assets are protected.

A business structure where the owner is personally responsible for all debts and obligations of the business.

A crucial benefit of a limited company where the business can operate independently of its owners, allowing it to make decisions, own assets, and enter contracts.

The responsibility of business owners for all debts and obligations of their business, even if it means using their personal assets.

The owners of a limited company are only responsible for the amount they invested in the business, protecting their personal assets from business debts. It's like having a shield separating your personal finances from the company's.

A limited company is a separate legal entity, meaning it's distinct from its owners. It can own property, enter contracts, and be sued independently. Think of it as having a legal personality of its own.

A limited company is a company structure where the owners are legally separate from the business. This means the business can own property, enter contracts, and be sued independently of its owners. Think of a company as a person with its own legal identity.

Partnerships lack this important feature. Each partner is personally liable for all debts and obligations of the business, even those incurred by other partners.

Sole proprietorships and partnerships are similar in that they lack a separate legal status. This means the business and the owner are considered one legal entity. This can make business owners personally responsible for all debts and obligations.

A business structure where a single individual owns and operates the business, bearing all the risks and reaping all the profits.

A business structure formed by two or more individuals who share the ownership, risks, and profits.

A business structure where the company is legally separate from its owners. It can own property, enter contracts, and be sued in its own name.

A business structure where the owner(s) have the flexibility to make decisions quickly without needing consensus from other parties.

A business structure where the owners need to reach a consensus before making any significant decisions.

A key advantage of a sole proprietorship is that the owner can make all the decisions without needing to consult anyone else, which can help them move quickly and decisively.

One potential disadvantage of a sole proprietorship is that the owner needs to manage all the day-to-day tasks and can't easily delegate or find help for specific skills.

A potential advantage of a partnership is that multiple partners bring in combined resources, which can be helpful for funding and starting a business.

A partnership allows for the sharing of responsibilities and expertise, leading to a more efficient and specialized division of labor.

One potential drawback of a partnership is that decisions require agreement among all owners, potentially slowing down the decision-making process.

A sole proprietorship or partnership ceases to exist when the owner(s) die or go bankrupt. But a limited company continues to exist.

Limited companies can raise capital through debentures (bonds) and shares (stocks), while sole proprietorships and partnerships cannot.

Sole proprietorships and partnerships require a business registration certificate from the Inland Revenue Department. Limited companies require multiple legal documents filed with the Companies Registry.

Sole proprietorships and partnerships pay 15% profits tax, while limited companies pay 16.5% profits tax.

When a sole proprietorship or partnership sells bad products, the owner(s) are personally liable for any damages or compensation.

In a limited company, the company itself is liable for defective products. The owners' personal assets are protected from business debts.

In a partnership, each owner is personally responsible for ALL business debts, even if they weren't directly involved.

A limited company is a separate legal entity - it's like a person with its own identity. So, the company's debts don't affect the personal finances of the owners.

Owners of a limited company are only responsible for the money they invested in the business. Their personal assets are protected.

Partnerships are simpler and cheaper to set up than limited companies.

Limited companies enjoy a separate legal status, allowing them to own property and enter contracts independently.

A limited company's owners have 'limited liability', meaning their personal assets are protected from business debts.

Partnerships are more flexible and have a lower tax rate than limited companies.

Limited companies have a more complicated and costly setup process compared to partnerships.

The owners benefit from a closeness with employees and customers.

A company's ability to last beyond the ownership of specific individuals.

A business can raise capital from a wider pool of investors through bonds and shares.

The owner(s) are personally responsible for business failures, losing all investments and potentially personal assets.

The owner(s) have less incentive to improve efficiency since personal gains are limited.

Set up is more straightforward, requiring less paperwork and cost.

The business is taxed at a higher rate than sole proprietorships or partnerships.