Personal liability company Flashcards
Name of personal liability company
Name must end with INC
Management of personal liability company
Minimum of one shareholder required and no limit to the number of shareholders
Capacity of personal liability company
There’s no limit to the number of shareholders, it can lead to expansion
Legal requirements of personal liability company
In th MOI it must be stated that its a company with personal liability
Liability of personal liability company
Directors have unlimited liability and are jointly liable for the debt even if they are out of office
Continuity of personal liability company
Unlimited continuity
Capital of personal liability company
Capital raised by issuing shares to its shareholders
Profit-sharing of personal liability company
Profits shared in the form of dividends in proportion to the number of shares held
Taxation of personal liability company
Pay tax on the profits of the business and declared dividends of shareholders
Advantages of personal liability company
Limited liability
Legal personality and continuity
No AGM necessary
Disadvantages of personal liability company
Complex establishment process
Can only rely on capital from members
Subject to double taxation
