features of a company Flashcards
what are features of a company
(11) separate legal entity, limited liability, perpetual succession, contractual capacity, common seal, transferable shares, ownership of assets, tax treatment, sue be sued, borrow , financing options
separate legal entity
the company has a legal personality of its own, it is a different legal entity from its shareholders
limited liability
shareholders are only liable to the unpaid amount of shares
perpetual succession
shareholders can come and go and owners can change but the company stays the there unaffected
contractual capacity
the company can enter into contracts with its own name independent of its shareholders
common seal
an official seal used by companies to authenticate documents like a deed or a contract
transferrable shares
shareholders can transfer their shares freely with only restrictions from the article of associations AOA. this means that owners of the company can change
tax treatment
the company is taxed on its profits and the shareholders are taxed on the dividends received
sue be sued
company can exercise its legal right to sue another person, and at the same time sued from someone
ownership of assets
company assets are own by the company itself and not by the shareholders
borrowing
the company can take loans and use its assets as collateral
financing options
company can raise capital by issuing new shares
