PUBLLIC AND PRIVATE LIMITED LIABILITY COMPANY: MEANING, FEATURES, ADVANTAGES/DISADVANTAGES, SOURCES OF FINANCE—BY INSTRUCTOR EUNICE OKOYE.
MEANING OF PUBLIC LIMITED LIABILITY COMPANY: A company may be defined as a business organization which has been incorporated. Public limited liability company is a company that has a minimum number of seven persons and has no maximum number of persons that can form it. It is owned by the members of the public.
FEATURES OF PUBLIC LIMITED LIABILITY COMPANY: The features of public limited liability company are as follow:
It has a minimum number of seven persons and has no maximum number of persons.
The shares can be traded in the stock exchange market.
Workers can become share holders.
The account is always published at the end of the period.
Its name ends with [PLC] Public Liability Company.
It is mandatory in Nigeria that 60% of Plc should be owned by Nigerian while 40% can be owned by foreigners.
ADVATANGES OF PUBLIC COMPANY: It has these advantages-
It can sell shares to members of the public.
It can borrow from the members of the public.
The shares of the company can be listed and become quoted in the stock exchange market.
It engages in different line of business.
DISADVANTAGES OF PUBLIC COMPANY: Public company has these disadvantages-
It is expensive to set up due to the large capital.
It takes time to take decision because members are many.
The account must be published at the end of the period.
There are personal touch to the workers.
SOURCES OF FINANCE TO PUBLIC LIMITED LIABILITY COMPANY: The income is got from the following:
It could be contribution from the members.
It can get loans and overdraft from the bank.
Loan can be got from private individuals.
Suppliers can also give credit facilities to the company.
TYPES OF CAPITAL OF A PRIVATE LIMITED COMPANY:
AUTHORIZE SHARE CAPITAL-This is the amount considered for the formation of a company.[registered capital]
ISSUED CAPITAL- It is part of the authorize share capital available to the members of the public for subscription.
CALL UP CLAPITAL—It is the portion of the issued share capital considered to be called up by the director.
RESERVED CAPITAL—This is the amount of capital which the director did not call up.
HOW A COMPANY CAN BE DISSOLVED: A company can be dissolved by voluntary liquidation through members, court and Corporate Affairs Commission [CAC].
PRIVATE LIMITED LIABILITY COMPANY: This the company owned by private individuals. It can be formed by a minimum number of two persons and maximum number of fifty persons.
FEATURES OF PRIVATE LIMITED COMPANY: A private limited company has these features.
It is owned by private individuals.
It can be formed by a minimum number of two persons and maximum number of fifty persons.
Their shares cannot be traded at the stock exchange market.
It has privacy.
It must end with the word LIMITED[ltd].
ADLVATANGES OF PRIVATE LIMITED COMPANY:
There is room for privacy.
The control and the management is very easy.
Its management structure is very simple.
The annual report is not published.
DISADVANTAGES OF PRIVATE LIMITED COMPANY:
The shares cannot be issued to the public.
It cannot be listed in stock exchange market.
It cannot borrow from the public.
SOURCES OF FINANCE OF PRIVATE LIMITED LIABILITY COMPANY.
It can get contribution from members.
It can secure loan from private individuals.
It can get loan and overdraft from bank.
Suppliers can also provide credit facilities.