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PUBLIC COMPANY (FACTORS RELATING TO A PUBLIC COMPANY (Name: Must end with…
PUBLIC COMPANY
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CHARACTERISTICS
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- ANY MEMBER OF THE PUBLIC CAN BUY SHARES
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- ACQUIRE CAPITAL BY SELLING SHARES TO THE PUBLIC THROUGH A PROSPECTUS
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- EXAMPLES ABSA BANK LTD & TIGER BRANDS LTD
DISADVANTAGES
- COMPLY WITH MANY LEGAL REQUIREMENTS
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- BOARD OF DIRECTORS CAN BE LESS INVOLVED IN MANAGING THE COMPANY
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- A DIRECTOR MAY BE LIABLE FOR THE LOSSES OF THE COMPANY IF THE DIRECTOR MADE UNLAWFUL DECISIONS
- SHARES HAVE TO BE MADE AVAILABLE TO THE PUBLIC
ADVANTAGES
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- UNLIMITED LIFETIME
- GREATER ACCESS TO
- FINANCIAL RESOURCES
- CAN APPOINT SKILLED AND
KNOWLEDGEABLE
MANAGERS
- SHAREHOLDERS CAN PARTICIPATE AT GENERAL MEETINGS AND OUTSIDE OF MEETINGS
- CAN LIST SHARES ON THE STOCK EXCHANGE (JSE)
LEGAL REQUIREMENTS
- A PROSPECTUS MUST BE MADE AVAILABLE
- MOI MUST BE LOGGED WITH THE REGISTRAR OF COMPANIES
- MUST HAVE FINANCIAL STATEMENTS AUDITED AND PUBLISHED IN NEWSPAPERS
- AGM (ANNUAL GENERAL MEETINGS) MEETINGS MUST BE HELD WHERE SHAREHOLDERS VOTE FOR DIRECTORS
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