Types of Companies

Types of Companies

• Sole Proprietorship: A company owned and operated by one individual, with unlimited personal liability.
• Partnership: A company owned and operated by two or more individuals, with unlimited personal liability.
• Limited Liability Company (LLC): A company that offers limited personal liability to its owners, with flexibility in ownership structure and management.
• Corporation: A company that is a separate legal entity, with limited personal liability to its shareholders, and a more formal management structure.

Company Formation

• Incorporation: The process of forming a company, which involves filing articles of incorporation with the state government.
• Articles of Incorporation: A document that contains basic information about the company, such as its name, purpose, and structure.
• Bylaws: A document that outlines the rules and procedures for the company's internal management and operation.

Company Structure

• Shareholders: Owners of the company who have a claim on its assets and profits.
• Board of Directors: A group of individuals elected by the shareholders to oversee the company's management and make major decisions.
• Officers: Individuals appointed by the board of directors to manage the company's day-to-day operations.
• Management: The team responsible for the company's daily operations and decision-making.

Company Financing

• Equity Financing: Raising capital by issuing shares of stock to investors.
• Debt Financing: Raising capital by borrowing money from creditors, such as banks or bondholders.
• IPO (Initial Public Offering): The first public sale of a company's stock, which allows it to raise capital and become a publicly traded company.

Company Governance

• Corporate Governance: The system of rules, practices, and processes by which a company is directed and controlled.
• Fiduciary Duty: The legal obligation of directors and officers to act in the best interests of the company and its shareholders.
• Duty of Care: The legal obligation of directors and officers to exercise reasonable care and diligence in their decision-making.

Company Insolvency

• Insolvency: A situation where a company is unable to pay its debts as they come due.
• Bankruptcy: A legal process where a company's assets are liquidated and distributed to creditors.
• Receivership: A process where a court-appointed receiver takes control of a company's assets and operations to manage its insolvency.

Types of Companies

• A Sole Proprietorship is a company owned and operated by one individual, with unlimited personal liability.
• A Partnership is a company owned and operated by two or more individuals, with unlimited personal liability.
• A Limited Liability Company (LLC) offers limited personal liability to its owners, with flexibility in ownership structure and management.
• A Corporation is a separate legal entity, with limited personal liability to its shareholders, and a more formal management structure.

Company Formation

• Incorporation is the process of forming a company, involving filing articles of incorporation with the state government.
• Articles of Incorporation contain basic information about the company, such as its name, purpose, and structure.
• Bylaws outline the rules and procedures for the company's internal management and operation.

Company Structure

• Shareholders are owners of the company who have a claim on its assets and profits.
• The Board of Directors is a group of individuals elected by the shareholders to oversee the company's management and make major decisions.
• Officers are individuals appointed by the board of directors to manage the company's day-to-day operations.
• The Management team is responsible for the company's daily operations and decision-making.

Company Financing

• Equity Financing raises capital by issuing shares of stock to investors.
• Debt Financing raises capital by borrowing money from creditors, such as banks or bondholders.
• An Initial Public Offering (IPO) is the first public sale of a company's stock, allowing it to raise capital and become a publicly traded company.

Company Governance

• Corporate Governance is the system of rules, practices, and processes by which a company is directed and controlled.
• Fiduciary Duty is the legal obligation of directors and officers to act in the best interests of the company and its shareholders.
• Duty of Care is the legal obligation of directors and officers to exercise reasonable care and diligence in their decision-making.

Company Insolvency

• Insolvency occurs when a company is unable to pay its debts as they come due.
• Bankruptcy is a legal process where a company's assets are liquidated and distributed to creditors.
• Receivership is a process where a court-appointed receiver takes control of a company's assets and operations to manage its insolvency.