Legal Structure Nandhika Emma jack

Public Company

"Listed on the Australian Security Exchange general public may buy and sell shares in those companies."
  • A Public Company is Incorperated

Examples:

  • Toyota
  • Facebook

Sources of Finance:

  • Shareholders - Up to 50

Size:

  • Small - Large

Advantages:

  • There is limited liability for the shareholders.
  • The business has separate legal entity. There is continuity even if any of the shareholders die.
  • These businesses can raise large capital sum as there is no limit to the number of shareholders.
  • The shares of the business are freely transferable providing more liquidity to its shareholders .

Disadvantages:

  • There are lot of legal formalities required for forming a public limited company. It is costly and time consuming.
  • In order to protect the interest of the ordinary investor there are strict controls and regulations to comply. These companies have to publish their accounts.
  • The original owners may lose control.
  • Public Limited companies are huge in size and may face management problems such as slow decision making and industrial relations problems

Credits:

Created with images by d26b73 - "reunion"

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