Corporation was unimportant in the past but today it is a dominant institution takes up to 95% of business over the world. Corporation is regarded as a bad apple, CEO’s considers corporation as a paradox which creates wealth but causes enormous. According to the narrator he views corporation as a society, if you get rid of it would be incomplete and it wouldn’t function effectively. The narrator describes corporation as a sports team, some team players are running, attacking, blocking, and catching the ball different roles but have a collective shared purpose to be successful and stay
c) Corporation – Private Limited Company In private limited company, minimum number of shareholders need to start the business are only two and can more capital can be raised as the maximum number of shareholders allowed is fifty. Board of Directors will control the management of the company. When the business of sole trader or partnerships on track, they can change to limited company form, then they can have the limited liability and debt interests of sustainable development. The advantage of private limited company is their shareholders have limited liability. It means that if the company experience financial distress because of normal activity, the shareholders' personal assets are not at risk of being seized by creditors.
(a) Owing to the limited liability, shareholders or directors of a company will not be liable for the debts incurred by the company in the course of its business. It is much easier for a company to raise finance for business because unlike a sole proprietorship or partnership it can issue additional shares to existing shareholders or to new shareholder. Also a company is allowed to issue debentures or execute floating charges to borrow money. The life or continuity of the company will not be affected by the death or bankruptcy of a shareholder or director of a company because of its characteristic of perpetual succession. Moreover, company’s ownership can still be changed relatively easily without disrupting the operation of the company although there are restrictions on the transfer of shares in a private company.
Governments through laws, journalists through reportages, people through purchase decisions or boycott actions: all these are example of how subjects which are not the owners of a firm can influence, and in some cases force, companies to undertake some desirable actions like publishing corporate reports or adopting a more sustainable business model. This implies a fundamental shift in companies’ management since shareholders are currently understanding that, in order to pursue their ultimate goal (that consists in increasing their own dividends), they have to enlarge the content of corporate objectives including stakeholders
When is a Parent Company Liable for the Actions of Its Subsidiary? From a purely legal perspective, a parent company is a legal entity that is separate from the juridical personality of its subsidiary. Still, a question arises as to whether the legal fiction of the juridical entity of each company is always strictly adhered to. In other words, may the legal separation between a parent company and its subsidiary be disregarded so that the former may be liable for the actions of the latter? If yes, in what circumstances should a court pierce the corporate veil?
This means that shareholders only need to repay the liabilities up to the amount of shares they hold and the shareholders’ personal assets are protected from being seized by creditors. Secondly, the company, as a separate legal entity, operates in perpetual session, whereby the
Three main features of a Limited liability company The limited liability company has three main features and these are the artificial person, limited liability, and tradable shares. The artificial person means that it is a distinct legal entity created by law and given rights and responsibilities like a regular person. It is so distinct that the shareholders cannot sue it. This feature makes it so powerful because they can improve productivity and they possess the legal rights of a human without the biological disadvantages. They cannot die of old age or get married and bear children.
2nd, the C Corporation pays taxes as well whenever it pays dividends to shareholders. Numerous businesses that decide to incorporate their business always choose the form of an S corporation instead in order to avoid double taxation. Tax designation filed with the IRS using Form 2553 is the only different between a C corporation and an S corporation. An S corporation can choose to pass the income, losses, deductions and credit for the corporation through to the shareholders of the corporation for federal tax purposes according to the IRS. With this kind of method, double taxation can be avoided by an S corporation that a C corporation is subject
The Shareholder and the Director have totally different roles in a limited liability company. Normally a shareholder is the individual who owns the said Company by holding shares whereas the directors have managing powers. In fact, it appears that there is confusion as to the separation of these two positions and as to the distinction of important factors when it comes to corporate governance. This article aims to provide a clear distinction of the roles of both the Shareholder and the Director in a company and demonstrate the fundamental right of a shareholder. Subject to the provisions stipulated in the Articles of Association of a company and/or to any decision given by the General Meeting, the Board of Directors is empowered to manage
The restriction maximum numbers of private limited companies will affect the credit standing is lower than that of a public companies, this will affect the financial and managerial resources of a private limited companies are comparatively limited. Secondly, the lack of transferability of shares will result a shareholder cannot leave a private company easily and quickly. The poor protection to members are always occur in private limited companies, the minority members may suffer at the hands of the majority members, this dissatisfied members cannot cut off their connection with the company except at a