Private Limited Companies Flashcards
What is a limited company?
A company that is owned by its shareholders, run by directors and where the liability of shareholders for the debts of the company is limited.
How much do the shareholders have to pay if the company goes into liquidation leaving debts?
The shareholders can only lose what they have invested in the company and cannot have their personal assets claimed in order to pay back debts that are owed.
For this reason, setting up a limited company is relatively low risk.
Who owns a company?
Shareholders
What documents do LTDs have to give to the registrar of companies before it can begin trading?
They have to draw up an information leaflet/booklet of what the shares include.
They have to obtain a trading certificate
What document does the registrar of companies issue which allows a private limited company to start trading?
A trading certificate
How can a company check to see whether another company has made profit recently?
Companies can apply to the registrar of companies for the most recent income statement of a company.
By law, all the companies have to send their latest accounts to the registrar and they are open for any individual or business to inspect.
What is the role of
- a director
- a manager?
A director is someone who has been elected by the shareholders at the AGM to sit on the Board of Directors. The Board is responsible for looking after the interests of shareholders.
ie, they are accountable for looking after the interests of the shareholders.
Directors appoint the manager to run the company.
