They also have to solve the problems of final accounts of different companies.
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Simply, it exists within a strict legal framework. If you want to create, operate, or close a limited company, then you have to comply with all the legal requirements. Here is an example: The business trades profitably for 5 years.
The company makes a loss and is unable to pay its debts. The directors have not behaved unlawfully. In these circumstances, ordinary creditors of the company cannot claim more than the value of what is in the company, that is the money value of its assets, when sold by a liquidator.
Of course if the company goes bust most creditors more than likely receive nothing. This is the single biggest attraction of operating a business through a limited company. The law treats a limited company as if it was a separate person - like you or me. It can open a bank account, buy property, and generally perform economic functions in just the same way as a private individual.
Duties of directors - directors have specific obligations. A director must not prefer his own interest to that of the limited company in the affairs of the company. He must comply with legal requirements to file an annual return with the Registrar of Companies, and to produce accounts and file those too complexity depends on size of company.
Directors careless or negligent - contrary to popular opinion, in practice directors behave much as they like. Regulatory requirements for filing annual returns and accounts are policed with a light hand.
If a director fails to perform his duties properly, a creditor, a shareholder, an employee, or another director who has suffered financial loss might take legal action against the director or the limited company.
But if no dispute arises, there is some flexibility in the system. There is a massive amount of legislation regulating this.
Today, the rate of Corporation Tax is such that most businesses will pay less tax as a company than the director - shareholders would pay as individuals.- Key Features of a Range of Commercial and Non-Commercial and Commercial Organizations An evaluation of the key features of a range of commercial and non- commercial organisations to illustrate differences in their funding and their business objectives PRIVATE SECTOR (Commercial) Private sector are companies owned by a .
Characteristics of private limited company is mentioned below. Characteristics of the private limited company Members – To start a company, a minimum number of 2 members are required and a maximum number of members as per the provisions of the companies act LIMITED COMPANY A limited company is incorporated under the Company Act it can be: Limited company by guarantee 2.
Limited company by share a) Private limited company (Sdn. Bhd.) b) Foreign Limited company 3. A public limited company is a type of limited company in the United Kingdom. Also known as a publicly held company, a PLC can issue shares for anyone to buy or trade on the London Stock Exchange.
Key Features of Limited Liability Companies and Partnerships Download Audio Version Limited liability is a feature describing an amount invested in a company or partnership.
The limited liability company, or LLC, is a popular business entity type among entrepreneurs and small business owners because of its liability protection and flexibility both in terms of tax treatment and operation.