Company and Advantages and Disadvantages of Incorporation

Topics: Corporation, Limited liability, Types of business entity Pages: 2 (577 words) Published: April 27, 2013
The formation of incorporation is by registration with the companies acts 1963-2012.Companies can be registered with limited or UN limted liability or as a private or limited company. The legislation will distinguish between limited and unlimited, by which liability of the members is limited, between the companies with share capital and without share capital. This went between the private and public companies. A company limited by shares Companies act S 5(2)1963. At the end of 1983, there were 78,491 on the register in this country. Out of all of these only 1,301 had share capital. Share capital is the contribution of the members to the assists of the company. It will be divided into shares of fixed amount, these are the shares authorised to issue, which will then be the share capital of the business. This is the company limited by shares, which will come in in two types. The private company limited by shares, and a public limited by shares. A private company can be owned by one person or it can be a family based company.PerS33 of the company’s act 1963 as amended by s7 of the 2006 Act. The company must have share capital, right to transfer shares are restricted, and number of members may not exceed 99. Private limited company, Under the S2 1983 Act it must have a share capital of 38,092, issued share capital must be paid in money worth 25% of the issued share capital There are also companies without share capital, these are called companies limited by guarantee S5 (2) b Companies Act 1963. Each member undertakes to pay a fixes amount, to the company in a wound-up situation. Winding up is the process leading to a company’s dissolution and legal death. The company will look to its guarantee fund. A guarantee company is considered unsuitable to trade. It is a suitable association for professional bodies, trade associations and clubs. The activities may be financed by donations or subscriptions. Being a limited company, guarantee company must have the...
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