Various Type Of Organization Structure |
A business may be carried on in any one of the following form:
1. Sole proprietorship (Part 1 of 3) 2. Partnership (Part 2 of 3) 3. Limited Company
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CHARACTERISTIC OF A LIMITED COMPANY |
A limited company is incorporated and governed under the Companies Act. It can be categorized as follows:
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COMPANY LIMITED BY SHARES
· The liability of a member’s contribution to the company’s assets is limited to the amount specified, unpaid on his shares, if any. · Once the shares are fully paid up, there is, in general, no further liability, i.e. if the company becomes insolvent, or falls into liquidation, the members are not required to make any further contribution to discharge its debts. · Thus, the total liability of a shareholder in a company limited by shares is his portion of the share capital. · In other words, the personal assets of a shareholder would not be available to the creditors of the company unless a personal guarantee had been given by the shareholder.
· A company limited by shares can be: · A private limited company · A public limited company
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PRIVATE LIMITED COMPANY
A private limited company is one which by its articles-
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PUBLIC LIMITED COMPANY 1. Cannot offer shares to the public unless a prospectus which complies with the requirements of the Companies Act has been registered with the Registrar Of Companies. The proposal for the issue or offer of shares to the public should first be submitted to the Securities Commission for approval before a prospectus can be accepted for registration. Such shares are freely transferable. |
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ADVANTAGES OF A LIMITED COMPANY
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COMPANIES LIMITED BY GUARANTEE
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COMPANIES UNLIMITED
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