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CHAPTER 1: Business Organization and Classification of Companies image,…
CHAPTER 1:
Business Organization and
Classification of Companies
Limited Liability
Partnership (LLP)
Differences with a
Company
No issuance of share
No right to issue share but company can issue share.
Flexible in decision making
No holding AGM
Section 340 - require company to hold AGM
Accounts need to be audited
Differences with
Conventional Partnership (CP)
Liability : LLP-unlimited, CP-limited
Property : LLP-belongs to the LLP, CP-belongs to the partners
Perpetual succession : LLP-have, CP-does not have
Legal entity separate from its partners : LLP-yes , CP-no
Characteristics of Limited
Liability Partnership (LLP)
Limited liability to its partners
Flexibility of internal buss regulation
Separate legal status
Has perpetual succession
Characteristics of Sole
Proprietorship
One man ownership
Unincorporated body
No separate legal entity
Unlimited liabilities
Capital contributed by the owner
Characteristics of Partnership
Min 2 persons and max 20 persons
Unincorporated body
No separate legal entity
Unlimited liabilities
Capital contribution by the partners
Registered Companies - Section 10
Company limited by guarantee
S.10, S.11 & S.12
Unlimited company
S.10
Company limited by shares
Private company : S.11
Public company : S.11 - can be listed or non-listed
Characteristic:
Separate legal entity
Incorporated bodies
Owner : min 1 member, max 50 for private and no limit for public
Capital : by allotting shares to shareholders
Liabilities : limited to the amount of shares subscribed
Advantages
Has a separate legal entity
Able to own property
Has perpetual succession
Enable the separation of management and ownership
The Different between Private
and Public Company
Restriction set out under S.42 & S.43:
Private : apply to all
Public : not applicable
Appointment or reappointment of directors (S.205)
Private : can be passed by written resolution (S.297)
Public : Must be done by separate resolution, unless members agreed to appoint by a single resolution
Commencement of business and borrowing (S.190)
Private : immediately after incorp
Public : must submit statement in lieu of prospectus & statutory declaration by a director or secretary (S.190(2))
Removal of director by ordinary resolution (S.206)
Private : not applicable
Public : applicable to all
Special Classes of Companies
Investment Companies - Interest Scheme Act 2016
Foreign Companies - S.2 & Part V Division 1 of CA 2016
Societies - Societies Act 1966
Trustee Corporation - S3, Trust Companies Act 1949
Co-operative Societies - Co-operative Societies Act 1993
Characteristic of Exempt Company
Must not more than 20 members
Its shares must not be owned directly or indirectly by any corporation
Bussiness firms
Related Companies
-S7 of CA 2016
Holding and Subsidiary Companies (S.4 of CA 2016)
Deemed related to another corporation.
Wholly-owned Subsidiary (S.6 of CA 2016)
Deemed to be wholly-owned subsidiary of another corporation.
Ultimate Holding Companies ( S.5 of CA2016)
Deemed to be ultimate holding company of another corporation.
Associated Companies (at least 20% and not more than 50%)
Deemed as an associated company of another company.
Bussiness firms
Prepared by:
Hayatul Husna Binti Mohd Khairuddin (2020465132)
