Ability exists to raise large amounts of capital
Shareholders have limited liability (except in in personal liability companies)
No restrictions on the number of shareholders.
Legal (juristic) & natural persons may be shareholders
Is continuity and transferability of shares
Divided into 4 classifications
Public companies ltd
Private companies (PVT) Ltd
State owned companies (SOC)
Personal liability companies Inc.
High degree of legal regulations
High operational costs
2 Types of companies
Non-profit companies (NPC)
Has 2 organs
Board if directors
General meeting of members
Is a legal (juristic) person
Has the potential for perpetual existence
Developed to meet business people’s need to obtain more capital
Private company & a personal liability company must have at least one director and a public company or a non-profit company must have three directors.
Private company can not list its shares on the stock exchange.
Public companies may raise capital by issuing shares to the public
Structure of a company facilitates appointment of specialized managers
Shareholders share in the profits when a dividend is declared
Company is registered by filing a memorandum of incorporation and a Notice of incorporation
Separation of ownership and control