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LIMITED LIABILITY COMPANY

CONTENT
  1. Meaning of Limited Liability Company
  2. Public Limited Liability Company
  3. Advantages and Disadvantages of Public Limited Liability Company
  4. Meaning of Private Limited Liability Company
  5. Advantages and Disadvantages of Private Limited Liability Company
  6. Comparison between Public and Private Companies

Meaning of Limited Liability Company

A Limited Liability Company is a company in which the responsibility or liability of members for debts of the company is limited to the capital they have contributed or agreed to contribute. The private properties of members are excluded, and all that members lose if the company fails is the money they have contributed. It is formed and registered under the law known as the Company Act. When a company is formed and registered with the Registrar of Companies, it is said to be incorporated. There are two types of Limited Liability Company namely, Private and Public Companies.

Public Limited Liability Company

A Public Limited Liability Company is a business unit that carries on business to make profit for its owners. Examples are Nigerian bottling company Ltd., Total Nigeria Limited, First Bank of Plc. It is owned by Shareholders and managed and control by Board of management.

Advantages of Public Limited Liability Company

  1. It can raise money from the public through issuing of shares and debentures. This enhances the company expansion.
  2. It is a legal entity because it can sue and can be sued.
  3. The company’s properties are different from that of its owners.
  4. It enjoys continuity because it has perpetual life. The company can only be wounded voluntarily or on the order of a law court.
  5. Share holders cannot lose more than the value of their shares. This is because the company enjoys limited liability.

Lesson tags: Business Studies Lesson Notes, Business Studies Objective Questions, JSS1 Business Studies, JSS1 Business Studies Evaluation Questions, JSS1 Business Studies Evaluation Questions Second Term, JSS1 Business Studies Objective Questions, JSS1 Business Studies Objective Questions Second Term, JSS1 Business Studies Second Term
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