Types of Companies
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Types of Companies

Created by
@GratefulSnowflakeObsidian

Questions and Answers

What is the origin of the term 'company'?

  • Derived from the Spanish words 'compania' meaning association and 'panaderia' meaning bakery
  • Derived from the Latin words 'com' meaning with/together and 'panis' meaning bread (correct)
  • Derived from the Greek words 'co' meaning common and 'pan' meaning all
  • Derived from the French words 'compagnie' meaning group and 'pain' meaning pain
  • What distinguishes a company from a partnership firm?

  • A company has more members than a partnership firm
  • A company's members contribute money, while a partnership firm's members contribute goods or services
  • A company is an incorporated association created by law, while a partnership firm is not (correct)
  • A company always deals with larger amounts of capital than a partnership firm
  • What denotes the capital of a company?

  • The number of shareholders in the company
  • The total assets of the company
  • The annual revenue generated by the company
  • The common stock contributed in money (correct)
  • How is a company formed?

    <p>By an Act of Parliament, Royal Charter, or registration under company law</p> Signup and view all the answers

    What can dissolve a company?

    <p>Law alone can dissolve it</p> Signup and view all the answers

    Study Notes

    Origins and Characteristics of a Company

    • Originated from the Latin word 'compania', meaning 'companion' or 'association'
    • Refers to a group of people united for a common goal, typically for business purposes

    Key Distinctions from a Partnership Firm

    • A company is a separate legal entity from its owners, with limited liability
    • Partners in a partnership firm have unlimited personal liability

    Capital of a Company

    • Denoted by its share capital, which is divided into shares of a fixed amount
    • Each share represents a unit of ownership in the company

    Formation of a Company

    • Formed by incorporating with the relevant government agency, such as the Securities and Exchange Commission (SEC)
    • Requires a memorandum of association, articles of association, and other legal documents

    Dissolution of a Company

    • Can be dissolved voluntarily by its shareholders or involuntarily by a court
    • May be dissolved due to bankruptcy, insolvency, or other legal reasons

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    Test your knowledge about the different types of companies and their definitions.

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