Unlimited Companies. Shareholders are going to have a say in the direction the company takes. The working of the Public Company is subject to more strict compliances of the provision of the Companies Act 2013. Organization. Type of companies under the Kenyan Companies Act 2015. The shares cannot be issued to the general public unless it is a public limited company. Similarly he also has to shoulder the entire burden of loss. Complex administration: Compared to running a business as a sole trader the administrative affairs of a Limited company are more involved. Regulation is far more stringent when you run your company as a PLC. Immigration Permits Most of the advantages and disadvantages of structuring your company as a privately held, limited liability company can be attributed to the company's status as a closely held company. Differance between a Limited and a Business Name, Kenya. The company continues irrespective of changes in named owners (shareholders). Kenya is a country in East Africa and a founding member of the East African Community (EAC). Related Party Transactions: Private limited companies enjoy more relaxations over compared to public limited companies in related party transactions as most of the deals in private limited company is within the close network of directors or promoters. And to invest in Public Limited Company you must be ready for some obstacles too. ... in the case of a public company limited by shares, ... under the provisions of Limited Partnerships Act (Cap. Its capital and largest city is Nairobi.The capital, Nairobi, is a regional commercial hub.The economy of Kenya is the largest by GDP in East and Central Africa. A company limited by guarantee requires all directors and members to undergo vetting before the company is Registered. And to invest in Public Limited Company you must be ready for some obstacles too. The chairman and board of managers are appointed by the government. The Initial Public Offering (IPO) Process. In comparison to a private limited company, it has more stringent regulatory requirements. 43- A. There is excessive Government control over public companies. If the business goes bankrupt, the owner will have to cough money from his own assets  and financial reserves to pay to the creditors and lenders. Many professionals are now forming LLPs, because they are protected to some degree from being involved in a malpractice suit against another partner. Sole traders have more privacy than limited companies, which could be a problem for some. There is a loss of control of the business. It is not often many shareholders see it this way. Public Limited Companies have several advantages and disadvantages; Advantages. Going “public” means a certain lack of control by the founders of the firm. These employees can be the directors of the company, the secretary as well as the staff including the receptionist! • The shareholders in a private company do not have direct control over the business. Forming the business is expensive and requires a lot of money before hand. More regulation. Its capital and largest city is Nairobi.The capital, Nairobi, is a regional commercial hub.The economy of Kenya is the largest by GDP in East and Central Africa. Two categories of … There could be a possible loss of control, as people may find that shareholders own over 50% of the shares, entitling them to the ownership of the business. While owning a private limited company has several advantages, there are some disadvantages associated with it as well, such as the inability to publicly sell shares and limits on growth. Agriculture is a major employer; the country traditionally exports tea and coffee and has more recently begun to export fresh flowers to Europe. Profits are shared either equally or as per the terms given in the written agreement. As said earlier, the financial benefit in the form of raising capital is the most distinct advantage. Most companies however, have an interest in laying out a long-term growth plan that takes patience and planning. Upon death or exit of a proprietor the BN ceases to exist, whereas a company can live forever in perpetuity outliving the directors. Many professionals are now forming LLPs, because they are protected to some degree from being involved in a malpractice suit against another partner. Let us discuss what disadvantages of Public Limited Companies the Zeus comes up with. A public limited company (PLC) is a type of business entity whose shares can be publicly traded via stock exchanges, but whose liability is limited. Limited Company Advantages and Disadvantages. Decisions on the way the company is run is done in meeting by the board and bound by resolutions. 30/10. Public Company registration is a complex procedure as it requires proper documentation. The advantages include tax efficiency, separate entity and professional status. Limited liability companies are structured similar to limited partnerships. Alternatively, it can be also used for the expansion plans of the company. Can raise more capital when compared to private limited companies; Have limited liability which means they cannot lose private assets in settlement of company debts. Organization. Public limited company is the large scale business that consists of 3 directors and 7 shareholders. These are Public companies limited by shares and Private companies limited by shares. Can raise more capital when compared to private limited companies; Have limited liability which means they cannot lose private assets in settlement of company debts. The people to whom the shares are issued are termed as shareholders. Disadvantages of a limited company. You have less overall control of the company. LastBull.com: Advantages and Disadvantages of IPO/Public Limited Companies, MPartners, Inc. These limited liability company advantages and disadvantages may help you be able to determine if an LLC structure is the right one for your business. Your Contractor Advice Line ... Companies House require certain company records and accounts from all limited companies, which become public record and can be accessed by anyone. It helps managers design the relevant marketing strategies for each stages of the PLC. The limited company business structure is the second most popular in the UK. Recognizing 7 shareholders and 3 directors; For Public Limited Company … The laws of almost all the countries specify the use of the word ‘limited ‘ or ‘Ltd’ after the name of the company. Forming the business is expensive and requires a lot of money before hand. There are no shareholders in public … For Public Limited Company registration, there is a basic requirement of a minimum of 3 directors & 7 shareholders. There is delayed decision making due to bureaucracy. Financial affairs are made public. Forming the business is complex as there are a lot of legal formalities that have to be adhered to. The company is generally is held separately for any wrongdoing, the case will be filed against the company and not the directors. If the company goes into debts, they are not liable to pay to the lenders and creditors from their own personal finance. Healy Consultants will be pleased to assist our Clients with Kenya company setup. International companies are important in the economic and developmental stability of Kenya. A company limited by guarantee (CLG) is an alternative type of corporation used primarily for non-profit organisations that require legal personality. This distributes the powers to more and more people which may lead to arguments between the directors and the shareholders. However, the latest legislation is a step in the right direction and Kenya has made great strides, coming from the 154th position in 2011. 7. If you want your shares listed, you need to meet strict discourse and filing requirements for the London Stock Exchange, and to keep up to date with such requirements on a regular basis. (Private limited company advantages and disadvantages). Limited liability public company. Company Formations » Public Limited Company : Public Limited Company: A public limited company is a company that has permission to offer its registered securities for sale to the general public, typically through a stock exchange, or occasionally a company whose stock is traded over the counter (OTC) via market makers who use non-exchange quotation services. The concept emphasizes on competitive dynamics. Definition: A Public Limited Company (PLC) is a separate legal business entity which offers its shares to be traded on the stock exchange for the general public. This is also known as a divorce of control. Since the company is now “public,” anyone can buy up shares, and there is no limit as to how many shares one can buy. A limited company is a separate entity and is a separate person in the eyes of the law. ADVANTAGES OR DISADVANTAGES OF LIMITED OVER A BUSINESS NAME. He will not be able to defend himself by saying that the act was committed by  his business and not by him. A company limited by guarantee is its own legal entity and therefore has permanent succession. More than 2.5 million companies across the United States are now taking advantage of the LLC structure to create jobs and market opportunities. 30) of the Laws of Kenya, limited partnerships must be registered with the Registrar of Companies. Disadvantages of Going Public . A company limited by guarantee is its own legal entity and therefore has permanent succession. There could be a possible loss of control, as people may find that shareholders own over 50% of the shares, entitling them to the ownership of the business. Business . As said earlier, the financial benefit in the form of raising capital is the most distinct advantage. There is a loss of overall ownership. LLCs are currently classified as a pass-through entity. This is the fifth type of business found in Kenya. A complete breakdown of limited company advantages and disadvantages. In some cases, the firm can be controlled by a board of directors who do not necessarily have the time for hands-on business management. Advantages of a Limited Company 1. • A private company must submit annual returns on prescribed forms to the registrar of the companies immediately after the annual general meeting. Differance between a Limited and a Business Name, Kenya. The public limited company is a separate legal entity, and each shareholder is a … In reality, this entails that decisions will be slow and often painful. The financial books and records of the firm are open to anyone, allowing the competition to see precisely how much profit or loss the firm is experiencing. This distributes the powers to more and more people which may lead to arguments between the directors and the shareholders. A sole entity might come to an end if the owner becomes bankrupt or has an untimely demise, with no one to look after the business. Like a sole trader, a partnership suffers from most of the incapacities and disabilities described above. In this case, a firm that was built up by one group (or person) can now be taken over by others since the firm has gone public. The advantages of Public Limited Company might stimulate you to start one, but all that glitters is not gold. Trademarks and Patents Depending on the purchase, the entire acquisition could potentially be paid in stock if you so wished. The partners in a partnership just lime in a sole proprietorship are personally liable for acts of the partnership Companies are generally separate entities from the shareholders and hence separately liable. Limited Company Registration Continuity. (For purposes of this explanation a Business Name refers to both a Sole proprietorship & Partnership) The company has to disclose some corporate information on the public records. Once a firm goes public, the firm is open to public inspection. The Limited Liability Partnership combines some of the features of a traditional partnership, in particular flexibility, with the limited liability benefits more typically associated with a company. Secondly, it means that those who invest in the firm are protected from extreme loss if the company fails. 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