1.

What do you understand by company? discuss the features of any two types of companies?

Answer»

company is basically a business. All corporations are called companies. It is a voluntary entity formed and organized to carry out a business. There are different TYPES of companies which include sole PROPRIETORSHIP, partnership, corporation, limited liability and public limited company.


Two types of companies:


1. Partnership: It is a type of ORGANIZATION which is run by two or more people. They are partners and have equal SAY in the running of the company. They share profits according to the profit sharing ratio DECIDED in the partnership deed. All partners have to share the burden of losses equally.


2. Public limited company: They are the companies whose shares are sold to the general public. They can have more than 50 shareholders. PLCs are strictly regulated and are required by law to publish their annual financial reports so that investors can look at the true position of the company before buying its stocks.




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