Public company Flashcards
Name of public company
Name ends with letters Ltd
Number of owners of public company
Minimum required a shareholder and no limit to the number of shareholders
Management of public company
The law forces personal liability on directors who were consciously reckless
Capacity of public company
Many people can join the company by issuing shares to the company
Legal requirements of public company
Register with registrar of companies by setting up the memorandum. A prospectus will be issued to the public to raise capital
Liability for private company
Shareholders have limited liability
Legal personality for private company
Has a legal personality
Continuity for private company
Unlimited continuity
Capital for private company
Capital raised by issuing shares to the public and borrow capital by issuing debentures
Profit-sharing for private company
Profits shared in the form of dividends in proportion to the share field
Taxation for private company
Pay tax on the profits of the business and declared dividends of share holders subject to double taxation
Advantages of private company
Limited liability
Legal personality and continuity
Provides job security
Disadvantages of private company
Complex establishment process
AGM must be held
Failure could lead to large scale unemployment
