Limited liability companies have several key features: 1) Their capital is divided into shares or stocks that are sold to raise money from public or private investors. 2) Shareholders are only responsible for the amount they invested and not other debts of the company. 3) They have the words "Ltd", "Plc", or "LLC" after their names. Private limited companies have few shareholders and restricted share sales, while public companies freely trade shares on stock exchanges.

1. Section 9
Objective 1
Features and Principles
Identify the essential features of limited
liability companies, cooperatives and
non-profit organisations

2. Limited liability Company (LLC) or
Corporation

3. Limited liability company or corporation
Features
– Any company whose capital is broken up into small
amounts called shares or stocks
– Shares or stocks are sold to the public or to close friends
– Holders of shares are called shareholders or
stockholders
– Limited companies are incorporated entities. They have
separate legal entity for its shareholders
– In the event the company goes bankrupt, shareholders
will only lose the amount invested in the company (and
not their personal property)

4. Limited liability company -
Features
• They all have either Ltd, Plc or LLC after their names
– The shareholders or stock holders are part owners of
the business
– Corporations pay corporation tax
– Shareholders pay personal taxes on profits (dividends)
earned in the business

5. Limited liability company -
Principles
– Limited companies may be either private or public

6. Private liability company
– Private liability company
• Shares in this company cannot be sold to
the public
• They are not traded on the stock exchange
• The shares are bought and sold privately
(by consent only)
• The sale of shares is limited to only close
friends, family, business partners and
maybe employees
• The company has few shareholders
• The title ‘Ltd’ appears after the company’s
name

7. Public liability company
• Shares in this company are sold or
traded on stock exchanges to the
public
• There are no restriction on the issue
of shares
• Shares are transferable
• The company has infinite life
• The company has many shareholders
• Company is managed by an elected
board of directors
• The title ‘plc’ appears after the
company’s name