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Unincorporated and incorporated business differences, image - Coggle…
Unincorporated and incorporated business
differences
Liability
Limited
the company and not the owner is liable for its debts
separate legal identities
company
owner
veil of incorporation
companies own their legal identity
"autonomous"
personal possessions of the owner are protected
owners security
Unlimited
the law consideres the owner and company one whole
same legal identity
the owners are liable for the business
debts
financial problems
failure
Definition
state of being responsible
by law
Issuing shares
ownership is allocated
investment of shareholders
gives them a part of the business
share (portion of it)
Private limited companies
documents and requirements
memorandum of association
legal document detailing the registred name, adress and share structure
articles of association
legal documents detailing the responsabilities of internal members
AGM
Annual general meeting
Advantages
shares
option to select the shareholder
ownership is kept private
more expertise
large enough to have specialized directors
maintain control
limited liability
protection
disadvantages
releasing financial information
legal restrictions
Public limited companies
anyone can become a shareholder
free to trade their share
FLOATATION
advantages
selling shares to the general public
limited liability
managerial economie of scale
disadvantages
releasing financial information
dividends
legal issues
losing control
