Features of limited liability companies

essential features of limited liability companies

1. Section 9 Objective 1 Features and Principles Identify the essential features of limited liability companies , cooperatives and non-profit organisations

2. Limited liability Company (LLC) or Corporation

3. Limited liability company or corporation Features Any company whose capital is broken up into small amounts called shares or stocks Shares or stocks are sold to the public or to close friends Holders of shares are called shareholders or stockholders Limited companies are incorporated entities. They have separate legal entity for its shareholders In the event the company goes bankrupt, shareholders will only lose the amount invested in the company (and not their personal property)

4. Limited liability company - Features They all have either Ltd, Plc or LLC after their names The shareholders or stock holders are part owners of the business Corporations pay corporation tax Shareholders pay personal taxes on profits (dividends) earned in the business

5. Limited liability company - Principles Limited companies may be either private or public

6. Private liability company Private liability company Shares in this company cannot be sold to the public They are not traded on the stock exchange The shares are bought and sold privately (by consent only) The sale of shares is limited to only close friends, family, business partners and maybe employees The company has few shareholders The title ‘Ltd’ appears after the company’s name

7. Public liability company Shares in this company are sold or traded on stock exchanges to the public There are no restriction on the issue of shares Shares are transferable The company has infinite life The company has many shareholders Company is managed by an elected board of directors The title ‘plc’ appears after the company’s name