Business Law Questions Essay Example | Topics and Well Written Essays - 2000 words - 1

Business Law Questions - analyse ExampleThis is different from Public companies where the shares are offered on a public stock exchange (Beatty & Samuelson, 2007). some other advantage would be that to form a Private Limited Company the minimum requirement is to require members with an swiftness limit of 50. In contrast, public Companies require a minimum of seven members with an unlimited upper limit. They are currently three partners and this is enough to form a Private Limited Company. Changing the backup to a Private Limited Company enables the business to be able to source for funds from a wider scope than before. They can still obtain funds from family and friends, but now come into consideration from fiscal institutions. Companies are able to obtain better loans as they tend to have better credit advance when compared with other forms of business like partnerships. This is similar to Public Companies. The main difference is that Public Companies can cosmetic surgery mo re funds since their books of account are open to the public. This increases the chances of getting debt financing. In forming a company they allow for enjoy the benefits of having limited liability, Salomon vs. A. Salomon & Co Ltd (1897). A limited company is limited to the extent of the shares held by separately individual shareholder. In the case the company winds up, the only claim creditors can have is to the extent of free up share capital. This is because in law, a company is a legal entity in its own office and is separate from the shareholders (Shtein & Lindgren, 1984). This also enables a continued existence even with the incapacitation of a shareholder (Adams, 2008). In the old partnership, any event leading to the incapacitation of a single shareholder would have led to winding up of the business.In case they would like to expand further, the upper limit of 50 members enables the company to source for more funds by allowing interested members to subscribe.