disadvantages of public limited company in kenya
The term “public” here is to be taken literally. 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. Organization. Disadvantages. Unlike a conventional limited liability company, the authorized capital of a PLC is divided into shares that can be traded on the stock exchange. The liability of the shareholders is limited to the amount paid by them during the purchase of the shares. The law does not make any distinction between the owner and his business. Once a firm goes public, the firm is open to public inspection. Companies must also adhere to different reporting and filing requirement according to the Companies Act of 2006. However, the directors are responsible for the way the company is run. Public Limited Companies have several advantages and disadvantages; Advantages. To check whether the chosen name is available for adoption, the promoters have to write an application to the Registrar of Companies of the State. They are responsible for the day to day management but are accountable to the government. Business entities in Kenya. Let us discuss what disadvantages of Public Limited Companies the Zeus comes up with. If the company goes into debts, they are not liable to pay to the lenders and creditors from their own personal finance. Limited liability: The liability of a public company is limited. • A private company must submit annual returns on prescribed forms to the registrar of the companies immediately after the annual general meeting. Since the company is now “public,” anyone can buy up shares, and there is no limit as to how many shares one can buy. 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. 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. A Public Limited Company (PLC) means, first, that the firm is parceled out into shares and sold “publicly” on any or all the globe's stock exchanges. Its shares can be acquired by anyone, either privately, during an initial public offering, or through trading on the stock market. Differance Between a Limited company and a Business name. Its capital is generally divided into transferable shares, subject to certain conditions. No shareholder is individually liable for the payment. For Public Limited Company registration, there is a basic requirement of a minimum of 3 directors & 7 shareholders. A private limited company hold high credibility in the national and international market. He is not legally bound to listen to anyone. Agriculture is a major employer; the country traditionally exports tea and coffee and has more recently begun to export fresh flowers to Europe. Separate and Independent Legal Entity The public limited company is a separate legal entity, and each shareholder is a … The company has to disclose some corporate information on the public records. You have less overall control 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. As a sole trader business your only obligation is to produce a set of sole trader accounts and file … (Private limited company advantages and disadvantages). For e.g. Recognizing 7 shareholders and 3 directors; For Public Limited Company … Healy Consultants will be pleased to assist our Clients with Kenya company setup. Profits are shared either equally or as per the terms given in the written agreement. Agriculture is a major employer; the country traditionally exports tea and coffee and has more recently begun to export fresh flowers to Europe. A company limited by guarantee is its own legal entity and therefore has permanent succession. Under certain circumstances, hostile investors might buy up a large amount of stock, giving them a strong voice on the board of directors. Going “public” means a certain lack of control by the founders of the firm. 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. In reality, this entails that decisions will be slow and often painful. Meanwhile many companies limited by shares are formed as private companies, you may get to know through this article about the advantages and disadvantages of a public limited company. If this is the case, then those who control the business do not own it, and do not see profit. There are some important disadvantages of a public limited company, compared to a private limited company. Shareholders may have other plans to maximise profits over social and ethical goals. Existence, which is not an incentive ( necessarily ) to rational management, transferability borrowing... Directors and members to undergo vetting before the company is owned by diverse members of the.... Directors and the shareholders of loss expansion plans of the PLC a proprietor the BN ceases to,. Benefit in the eyes of the public ( and keeps a substantial commission ) may! Liability of the business when you run your company as a divorce of by. Partnerships must be registered with the Registrar of the company continues irrespective of changes in named owners ( ). Malpractice suit against another partner to shoulder the entire acquisition could potentially be paid in stock you! 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