Write down the at least ten distinguishing features of a limited-00042
This subjective question is related to the book/course
vu acc501 Business Finance.
It can also be found in
vu acc501 Mid Term Solved Past Paper No. 3.
The basic difference between a partnership and a limited company is the concept of limited liability.
If a partnership business runs into losses and is unable to pay it's liabilities, its partners will have to pay the liabilities from their own wealth.
In case of limited company the shareholders don't lose anything more than the amount of capital they have contributed in the company. It points that personal wealth is not at stake and their liability is limited to the amount of share capital they have contributed.
The concept of limited company is to mobilize the resources of a large number of people for a project, which they would not be able to afford independently and then get it managed by experts.
Listed Company have more than twenty partners, so problem of extra capital is reduced to minimum.
The liabilities of the members of a company is limited to the extent of capital invested by them in the company. There are certain tax benefits to the company, which a partnership firm can not enjoy. In Pakistan, affairs of limited companies are controlled by "Companies Ordinance" issued in 1984. The formation of a company and other matters related to companies are governed by "Securities and Exchange Commission of Pakistan (SECP)
