English Company Law - Companies
The mechanisms by which a company can be formed, as well as the benefits and drawbacks of conducting business through a company, are critical considerations. The focus of this discussion will be on the various types of businesses that can be established. The CA 2006 defines a variety of various types of businesses that can be classified based on particular features, such as: Is it going to be a public or private company? Is the company's members' liability to be limited or unlimited? If the company's liability is to be infinite, it must be private; the law prohibits the formation of unlimited public companies. Is there a share capital in the company? Private firms do not required to have a share capital, however the vast majority do (as of March 2019, there were 4.2 million companies established in the UK, with only roughly 150,000 without a share capital). A limited company with no share capital is referred to as a 'limited by 1. guarantee' firm. Because companies limited by share capital outnumber firms limited by guarantee, will concentrate on companies limited by share capital. Because the focus is on companies limited by shares, the first two features described above, beginning with the distinctions between public and private companies, are critical.
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