Private and Public Limited Companies

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The next type of business is a company. There are two types of companies. Public and private limited companies. Both types of companies will need the articles of association and the memorandum of association; these are two legal documents. The articles of association must include rules for having shareholder meetings, list of directors, and their job. It also should include details of how accounts will be recorded and lastly voting rights of shareholders. The memorandum of association must include the company’s name and main business and address. It should state what the purpose of the business is and statement of limited liability. Lastly it should state the number of shares that can be sold to the public, if a public limited company, or friends and family if a private limited company.
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The first type of company is private limited companies. Private limited company must have a least 2 shareholders which can only be family and friends. Furthermore, profits made by the company must be paid as dividends to shareholders and they must have LTD in its name. Examples, of a private limited company are Virgin Atlantic and New Look.

Advantages of a private limited companies are that if they sell shares they gain all the money from it; they can then use this money towards the business. Also shares can only be sold to family members which ...

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