Limited Liability Companies
These are divided into two (2):
1. Private Limited Liability Company:
This is a form of business organisation which is privately owned by a minimum of two (2) and a maximum of fifty (50) members. By its nature of existence, it cannot offer its shares to the public for subscription; e.g. Heinemann Educational Books Nig. Ltd.
Features of a Private Limited Liability Company
- It has a minimum of 2 and a maximum of 50 members.
- The company does not sell shares to the public to raise capital.
- The shareholders enjoy profits earned by the company and also, bear the losses incurred.
- Shareholders contribute their funds for the business as shares.
- It has larger capital shareholders when compared to partnership and sole proprietorship.
2. Public Limited Liability Companies:
A joint stock or public limited liability company is a form of business organisation in which the liability of the shareholders is limited to the amount of capital they contributed. It is made up of a minimum of seven (7) members without a maximum. Examples include Nigeria Bottling Company Plc., Zenith Bank Plc., etc.
Features of a Public Limited Liability Company
- It enjoys widespread ownership since it does not have a maximum number of members.
- The shareholders have limited liability.
- Shareholders can freely transfer or sell their shares.
- The death or retirement of a shareholder does not affect the company.
- They can sell shares to the general public to raise capital.