A limited liability company (LLC) is a business structure where the owners (shareholders) are liable only to the amount they have invested. There are two main types of LLCs - private limited companies and public limited companies. Private limited companies have a minimum of one shareholder and do not have to trade shares on a public exchange or publish financial statements, while public limited companies have a minimum of two shareholders and must trade shares publicly and publish financial statements annually. To form an LLC, one must obtain name approval, prepare articles of association and sign shareholder documents, appoint directors and a secretary, submit required documents and pay fees, and obtain a company certificate and advertise the new company.

1. FORMATION OF LIMITED LIABILITY
COMPANY

2. INTRODUCTION
Companies
Limited
Companies
Private
limited
company
Public
limited
company
Companies
limited by
guarantee
Unlimited
Companies

3. TYPES OF COMPANIES
• Limited company
A limited company is one in which the liability of
the members is limited. The liability of the members
is limited to the amount if any unpaid on shares held
by them.
• Unlimited companies
A company not having any limit on the liability of
its members is termed as the unlimited companies.

4. WHAT IS A LIMITED LIABILITY
COMPANY?
• A business structure where the owners
(shareholders)are liable only to the amount they
have invested.
• It is to be treated as a “separate legal entity”
according to the company act. (2007)

5. TYPES OF LIMITED LIABILITY
COMPANIES
• Public limited company
• Private limited company

6. PUBLIC LIMITED COMPANY
• Have a minimum of two shareholders.
• Have to be registered with the registrar of
companies as a “Public Limited Company”.
• Have the abbreviation of “plc” attached to its
official name. Ex: ABC (PLC)
• Have to trade its shares on the public exchange.
• Have to publish its financial statements annually.

7. PRIVATE LIMITED COMPANY
• Have a minimum of one shareholder.
• Have to be register with the registrar of companies
as a “Private Limited Company”.
• Have the abbreviation “ltd” attached to its official
name, Ex: ABC Private (ltd) Company.
• Does not have to trade its shares on the public
exchange. (stock market)
• Does not have to publish its financial statements.

8. FORMATION OF LIMITED LIABILITY
COMPANY
1. Obtain a name approval.
2. Prepare Article of Association and signing the
shareholders.
3. Point out the Directors and Secretary
4. Provide necessary documents.
5. After confirming that documents, should pay
each document charges.
6. Obtain the certificate of company and
advertising.

9. Advantages of limited liability company
• More flexibility
• Limited liability
• Fewer compliance issues
• Perpetual existence
• Investors
Disadvantages
• Raising money
• Less structure
• Government regulations
• Taxation