“Features of a Private Limited Liability Company” is a topic Educareguide considers worth discussing.
Additionally, many people research this topic, especially students who are writing various examinations worldwide, including WASSCE candidates).
What are the features of a private limited company, and how does it differ from a public limited company?
Assuredly, you will find all the answers you seek just below.
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The Characteristics Of A Private Company
Factually speaking, Private Limited Liability Company possesses the following features:
Number of Owners:
First, a minimum membership of two (2) and a maximum of fifty (50) shareholders can form a Private Limited Liability Company.
Transferability of Shares:
Furthermore, there is a restriction on members’ rights to transfer their shares. Thus, the members (shareholders) cannot transfer shares to themselves without the other members’ consent.
Issuance of Shares:
Also, the company law prohibits a private limited liability company from issuing its shares to the general public.
As a result, it has no right to advertise its shares for public purchase. Likewise, it cannot invite the public through the stock exchange to buy shares from the business.
Publishing of Annual Account:
Also, the law requires a public company to publish its final annual account.
Thus, the final annual account of a company is a public document, so the company cannot classify the document.
Furthermore, a private limited liability Company requires better documentation to set it up than a sole proprietorship.
What Are The Features Of A Private Sector Company?
First, a company is an association of two or more persons. Indeed, these persons come together to contribute shares to carry out a business to profit-making.
Secondly, the owners’ liability is up to only the amount of money they contribute as shares.
Furthermore, a Limited Liability Company is a Company Limited by Shares. As a result, the liquidator will use only the capital the owners contribute to pay the company’s debts.
The liquidator will not use the owners’ private properties and funds to pay the company’s debts. Here, a liquidator is a person that a government appoints to see to the dissolving process of the life of a company.
Moreover, several examining bodies, including WAEC, ask questions on this sub-topic. For example, is the Business Management WASSCE examination.
Therefore, Educareguide is here to assist you in understanding this topic thoroughly.
Frequently Asked Questions On Private Company
- What is the nature of a Private Limited liability Company?
- Also, state and explain the features of a Private Limited Liability company.
- Alternatively, what are the characteristics of a private limited liability company? Etc.
Furthermore, the sub-topic is an integral part of the Business Management for Senior High School Students across the West African sub-region.
Nigeria, Ghana, Sierra Leone, The Gambia, and Liberia are involved in this regard.
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Finally, I will say that students must learn the Features of a Private Liability Company very well. As a result of that information, your will know your rights and responsibilities as an owner of a company.
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