What are the advantages of Companies?

1.	What are the advantages of Companies?
Answer» 1. Large Capital: A company can secure large capital compared to a sole trader or partnership. Large amount of capital is necessary for conducting business on a large scale. 2. Limited Liability: The liability of a shareholder is limited. The risk of loss is limited to the unpaid amount on the face value of shares held. In the case of a company limited by shares, the liability of a shareholder is restricted to the unpaid amount on the shares held by him. 3. Transferability of Shares: Transaction of Shares between two individuals is easy. So there is liquidity of investment. Any shareholder can easily convert his shares into money by selling his shares.

Answer»

1. Large Capital: A company can secure large capital compared to a sole trader or partnership. Large amount of capital is necessary for conducting business on a large scale.

2. Limited Liability: The liability of a shareholder is limited. The risk of loss is limited to the unpaid amount on the face value of shares held. In the case of a company limited by shares, the liability of a shareholder is restricted to the unpaid amount on the shares held by him.

3. Transferability of Shares: Transaction of Shares between two individuals is easy. So there is liquidity of investment. Any shareholder can easily convert his shares into money by selling his shares.

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