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PERSONAL LIABILITY COMPANY (FACTORS RELATING TO A PERSONAL LIABILITY…
PERSONAL LIABILITY COMPANY
CHARACTERISTICS
MUST MEET CRITERIA FOR A PRIVATE COMPANY
MEMORANDUM OF INCORPORATION (MOI)
NAME MUST END WITH Inc
Similar to private companies
DIRECTORS AND PREVIOUS DIRECTORS ARE LIABLE FOR THE DEBT
THE BOARD OF A PLC MUST COMPRISE AT LEAST 1 DIRECTOR
ADVANTAGES
UNLIMITED LIFETIME
GREATER ACCESS TO FINANCIAL RESOURCES
CAN APPOINT SKILLED AND KNOWLEDGEABLE MANAGERS / WORKERS
SHAREHOLDERS CAN PARTICIPATE IN MEETINGS
COMPANY DOES NOT HAVE TO PUBLISH FINANCIAL STATEMENTS
DISADVANTAGES
UNLIMITED LIABILITY
NOT EASY TO START UP
HIGH TAX
HIGH COSTS IN ESTABLISHING A PLC
MUST COMPLY WITH LEGAL REQUIREMENTS
FACTORS RELATING TO A PERSONAL LIABILITY COMPANY
NAME: MUST END WITH INC. (INCORPORATED)
OWNERSHIP: ONE OR MORE SHAREHOLDERS
MANAGEMENT: MANAGED BY ONE OR MORE DIRECTORS
LEGAL ENTITY: OWNERS AND THE COMPANY HAS SEPARATE ENTITIES
LEGAL REQUIREMENTS: MOI, FINANCIAL STATEMENTS
DIVISION OF PROFITS: IN FORM OF DIVIDENDS BETWEEN SHAREHOLDER
LIABILITY: UNLIMITED LIABILITY - PARTNERS ARE LIABLE FOR DEBT OF THE BUSINESS
CONTINUITY: UNTIL CLOSED OR LIQUIDATED
DEF: This company has unlimited liability where directors and business is liable for debts. This form of ownership is used for small firms