Companies
Have a legal identity
Are incorportated
Have limited liability
Owner is only liablefor what they have invested in the business and no more
Gaining legal company status
Memorandum of association
Company name
objectives
athorised share capital
Articles of association
rights of shareholders
roles of directors
frequency of meetings
issued with certificate of incorporation
Limited companies are often family owned
Shareholders of limited companies are often directors
Limited Companies ( LTD)
Financial risk for investors reduced
Company sued in own name
Wider range of borrowing opportunities
Funding growth easier
Accounts must be audited
Must conform with extensive formalitiestakes up management time
Shares can only be sold privately
Public limited company (PLC)
May have even better access to credit and very large amounts of finance
May have better reputation from Stock listing
Cost of floatation is high
Must keep a wide range of people informed
Greater admin costs
May be vulnerable to takeover
May lose control of the business
Shareholders may focus on the short term